Ondo Finance has introduced in-kind conversion for its tokenized stock product, allowing approved institutions to exchange shares and exchange-traded funds they already hold for matching Ondo Stocks tokens, or to redeem tokens back into the underlying securities. The feature runs through Alpaca's Instant Tokenization Network.

Institutions move shares by internal book entry from their Alpaca accounts to Ondo's account, and the corresponding tokens are issued onchain. Conversion is available on Ethereum and BNB Chain and operates alongside Ondo's existing process, in which new tokens are minted using cash.

Until now, an institution that already owned the shares still needed separate cash to create the equivalent tokens. That created financing costs and timing gaps between traditional holdings and onchain positions. In-kind conversion removes that step for firms that already carry inventory.

Access is limited to entities with active accounts at both Ondo and Alpaca and is approved case by case. RWA.xyz data showed Ondo with about $3.66 billion in distributed asset value across more than 440 products, making operational efficiency for market makers and other large holders increasingly relevant.