--- title: Ondo Launches In-Kind Conversion for Tokenized Stocks and ETFs url: >- https://www.cryptocatalyst.news/articles/2026-09-21-ondo-launches-in-kind-conversion-for-tokenized-stocks-and-etfs canonical: >- https://www.cryptocatalyst.news/articles/2026-09-21-ondo-launches-in-kind-conversion-for-tokenized-stocks-and-etfs date: '2026-09-21T20:23:32.367736+00:00' category: policy tags: - ondo - tokenized-stocks - etfs - institutional-investing - sec - blockchain source: CoinTelegraph source_url: >- https://cointelegraph.com/news/ondo-lets-institutions-convert-stocks-directly-into-tokenized-shares?utm_source=rss_feed&utm_medium=rss&utm_campaign=rss_partner_inbound sources: - name: CoinTelegraph url: >- https://cointelegraph.com/news/ondo-lets-institutions-convert-stocks-directly-into-tokenized-shares?utm_source=rss_feed&utm_medium=rss&utm_campaign=rss_partner_inbound - name: CoinDesk url: >- https://www.coindesk.com/markets/2026/09/21/why-this-investment-bank-sees-little-demand-for-tokenized-stocks-despite-sec-s-new-trading-rules publisher: CryptoCatalyst summary: >- Ondo launches in-kind conversion for tokenized stocks and ETFs, letting institutions mint and redeem shares using underlying securities instead of cash. TD Cowen sees limited deman image: >- https://www.cryptocatalyst.news/images/articles/2026-09-21-ondo-launches-in-kind-conversion-for-tokenized-stocks-and-etfs.webp generated_by: automated editorial pipeline --- # Ondo Launches In-Kind Conversion for Tokenized Stocks and ETFs Ondo has launched a new system allowing approved institutions to mint and redeem tokenized stocks and ETFs using the underlying securities. This in-kind conversion process simplifies the tokenization of traditional assets, potentially lowering costs and increasing efficiency. The move comes as the demand for tokenized stocks remains uncertain despite new SEC rules. ## Key takeaways - Ondo's in-kind conversion lets institutions mint tokenized stocks and ETFs using underlying securities, not cash. - TD Cowen expects limited demand for tokenized stocks despite new SEC rules. - The system reduces costs and complexity for institutional investors. - Ondo's move aligns with its strategy to bridge traditional finance and blockchain. Ondo has introduced an in-kind conversion system that enables approved institutions to mint and redeem tokenized stocks and ETFs using the underlying securities instead of cash. This new process allows institutions to convert traditional stocks directly into tokenized shares, streamlining the tokenization process and potentially reducing costs and complexity. ## How the In-Kind Conversion Works Ondo's system eliminates the need for cash transactions during the tokenization process. Institutions can now convert their existing stocks into tokenized shares by depositing the underlying securities directly. This approach is expected to make the tokenization of traditional assets more efficient and cost-effective, as it bypasses the need for additional liquidity. ## Why This Matters for Institutions The in-kind conversion system could attract more institutions to the tokenized asset space by simplifying the process and reducing operational hurdles. By using the underlying securities, institutions can avoid the volatility and liquidity risks associated with cash transactions. This move aligns with Ondo's broader strategy to bridge traditional finance and blockchain technology, making tokenized assets more accessible to institutional investors. ## The Broader Context of Tokenized Stocks Despite the new SEC rules opening a path for trading tokenized stocks outside traditional markets, demand remains uncertain. According to a report by CoinDesk, TD Cowen expects limited demand for tokenized stocks. The investment bank cited a lack of institutional appetite for holding tokenized versions of assets that are already easily accessible in traditional markets, suggesting that even with regulatory clarity, adoption may be slow. For those interested in the broader landscape of tokenized assets, you might want to explore how other platforms like [Bybit](/articles/2026-06-08-bybit-lets-retail-investors-buy-tokenized-ipo-shares-bypassing-wall-street) and [Kraken](/articles/2026-07-05-kraken-allows-tokenized-stocks-as-collateral-for-leveraged-trading) are also contributing to this evolving market. ## FAQ ### What is Ondo's in-kind conversion system? Ondo's in-kind conversion system allows approved institutions to convert traditional stocks directly into tokenized shares by depositing the underlying securities, bypassing cash transactions. ### How does the in-kind conversion system benefit institutions? The system simplifies the tokenization process, reduces operational hurdles, and avoids the volatility and liquidity risks associated with cash transactions. ### What is the current demand for tokenized stocks? Despite new SEC rules, demand for tokenized stocks remains uncertain, with TD Cowen expecting limited adoption due to a lack of institutional appetite. ### Why is Ondo's in-kind conversion system significant? It makes the tokenization of traditional assets more efficient and cost-effective, potentially attracting more institutions to the tokenized asset space. ## Sources This article synthesizes reporting from [CoinTelegraph](https://cointelegraph.com/news/ondo-lets-institutions-convert-stocks-directly-into-tokenized-shares?utm_source=rss_feed&utm_medium=rss&utm_campaign=rss_partner_inbound), [CoinDesk](https://www.coindesk.com/markets/2026/09/21/why-this-investment-bank-sees-little-demand-for-tokenized-stocks-despite-sec-s-new-trading-rules), written by an automated editorial pipeline. See https://www.cryptocatalyst.news/editorial-policy. ## How to cite CryptoCatalyst.news, "Ondo Launches In-Kind Conversion for Tokenized Stocks and ETFs", 2026-09-21, https://www.cryptocatalyst.news/articles/2026-09-21-ondo-launches-in-kind-conversion-for-tokenized-stocks-and-etfs