Bringing U.S. Stocks and ETFs onto the Blockchain: Ondo Founder Allman Discusses Brokerage Partnerships and the Involvement of BlackRock and Goldman Sachs in Governance Verification

05/06/2025

Tokenization of Products Agreement

Ondo Finance founder Nathan Allman stated in an interview on May 4 that Real World Asset Tokenization (RWA Tokenization) has become a major trend in the future of financial markets. He revealed that traditional institutional giants such as BlackRock, Franklin Templeton, and Goldman Sachs have entered the space, and even U.S. brokerage firms have expressed a willingness to cooperate. He indicated that all assets will move towards instant settlement and borderless circulation within the next ten years, showing optimism about the future development of blockchain.

Ondo Turns U.S. Treasuries into Tokens? Nathan: Making Stablecoins Earn Interest

Allman explained that they initially chose “U.S. Treasuries” as on-chain assets due to their high liquidity and stable interest rates. They designed two products:

OSG: Exclusively for qualified investors
USDY: Similar to stablecoins but capable of earning interest, open for secondary market circulation (subject to KYC)

This type of product is known as Yield Coins, primarily offering higher-tier stablecoin options compared to USDC and USDT.

Plans to Bring ETFs and U.S. Stocks on Chain, Breaking Global Market Restrictions

Ondo is currently promoting a “Global Markets” platform, allowing global users to buy U.S. stock ETFs as if they were using online brokerages like Robinhood or Interactive Brokers, but all done on-chain. Allman emphasized:

No need for traditional brokerage accounts
24/7 settlement, avoiding T+2 delays
Easier cross-border trading without concerns about holiday delays

(Ondo Finance launches the tokenized asset trading platform Ondo Global Markets, reshaping the landscape of traditional financial markets.)

Building Own Blockchain Ondo Chain, Institutions Need “Stability, Security, and Regulation”

To attract institutional participation, Ondo built Ondo Chain:

Utilizes Cosmos technology with cross-chain governance capabilities
Node validators must undergo a review to prevent money laundering and front-running
Supports minting and redeeming assets on multiple public chains (like Ethereum)

In the future, asset management firms like BlackRock and Franklin Templeton will be allowed to become node validators, participating in governance and validation.

Why Not Use Ethereum? Too Decentralized for RWA

Regarding why they won’t continue using Ethereum, Allman stated:

“Real-world assets do not prioritize decentralization as an application.” The needs of RWA are stability, compliance, and cooperation with financial institutions, rather than open governance. He even noted that while Ethereum still has Total Value Locked (TVL), its popularity in RWA applications has gradually been replaced by other chains.

(Ondo Finance launches Ondo Chain: a complete network designed for tokenized asset trading.)

Inspiration from DeFi Summer: One-Click Asset Movement, No Lockup, Fully Composable

Allman recalled the experience during the 2020 DeFi Summer, believing that “asset liquidity” at that time represented the future of finance:

All assets exist in wallets, convertible with one click on a platform
No lock-up periods, no contractual restrictions
Complete composability, allowing users to concoct their own financial strategies

This kind of freedom should also be extended to traditional assets like stocks and bonds.

Will Regulations Be a Barrier? Actually More Friendly Than Expected

Allman stated that while there are many controversies surrounding interest-bearing stablecoins, as long as the product design is correct, such as classifying it as a “security” rather than a “stablecoin,” there is already a reasonable regulatory framework. He believes that regulation has become much more friendly:

The SEC is now encouraging innovation, unlike former chair Gary Gensler
Banks and brokerages have shifted from “prohibiting cooperation” to “competing for cooperation”
Legislation for stablecoins is expected to be released within 4 to 6 months, opening the compliance door

Retail Investors Can Become Hedge Funds? The Major Benefit of Tokenization is “Democratizing Finance”

Allman emphasized:

“The core of all this is to allow global users to enjoy high-end financial services at low costs.” For instance:

Main broker services, previously only available to hedge funds, will now be accessible to everyone
You don’t need $100,000 to invest in U.S. stocks or asset allocation
Breaking the monopoly of financial centers, allowing users in Asia and Africa to participate fairly in the U.S. market

Allman is Optimistic About the Next Decade, Where All Assets Will Be Globally Circulating and Settled Instantly

Allman is very optimistic about the future, believing that:

Within ten years, all assets will move towards instant settlement and global circulation
Financial institutions will shift from opposing to embracing blockchain
The service threshold gap between retail and institutional investors will gradually disappear

Risk Warning

Investing in cryptocurrencies carries a high level of risk, and prices can be highly volatile, leading to potential loss of principal. Please evaluate risks cautiously.