Ondo tokenizes IVV ETF and Micron under U.S. custody

Ondo has tokenized shares of BlackRock's IVV ETF and Micron Technology under a U.S. custodial model. The company completed the tokenizations recently and made the blockchain-based tokens available to investors subject to its custody and compliance framework.

The tokens are digital representations on a blockchain that confer beneficial ownership claims in the underlying ETF and stock. The actual ETF shares and stock positions remain with a regulated U.S. custodian, which holds the physical certificates or book-entry records. Token holders can transfer the tokens on-chain and can redeem them for the underlying assets through the custodian, subject to eligibility and applicable rules.

IVV is the iShares Core S&P 500 ETF. Micron Technology is a Nasdaq-listed maker of memory and storage semiconductors. Ondo applied the custodial token model to both an ETF and an individual equity, creating two types of tokenized U.S. securities.

The tokenized instruments are structured to operate within the U.S. regulatory framework. Custody, compliance and recordkeeping are managed through the U.S. custodian. Access to the tokens and the ability to redeem them may be limited to investors and platforms that meet custody and regulatory requirements.

Supporters contend the custodial token model can allow fractional ownership and enable transfers outside conventional market hours while keeping settlement and investor protections tied to regulated custody. Redemption processes typically require coordination with the custodian and compliance checks before the underlying shares are delivered.

The development adds to other efforts to link on-chain settlement technology with off-chain regulated assets. Market participants and regulators continue to evaluate operational, custody and investor-protection issues as more traditional securities are represented in token form.