Ondo Finance Transfers $95 Million to BlackRock’s Tokenized Fund, BUIDL, Enhancing OUSG Speed and Utility

Ondo Finance Transfers $95 Million to BlackRock’s Tokenized Fund, BUIDL, Enhancing OUSG Speed and Utility

Crypto News – Ondo Finance has made headlines with its announcement of a substantial $95 million transfer to BlackRock‘s freshly unveiled tokenized fund, BUIDL. This marks a groundbreaking moment as it becomes the first crypto protocol to embrace a tokenized fund for its operations.

The primary objective behind this move is to streamline and expedite settlements for Ondo’s US Treasury-backed token, OUSG, thereby augmenting its attractiveness and functionality within the cryptocurrency sphere.

Nathan Allman, CEO of Ondo Finance, emphasized that the transition to BlackRock’s BUIDL will notably accelerate both the subscription and redemption processes for OUSG. This means a shift from the conventional settlement period of trade date plus two days to instantaneous transactions, aligning better with the 24/7 operational rhythm of the crypto market.

This strategic decision comes in response to investor concerns regarding the prolonged redemption timelines previously associated with OUSG, a mismatch with the fast-paced nature of the crypto market.

The migration is already in motion, with Ondo having already transferred $15 million worth of OUSG backing assets to BUIDL, and an additional $80 million expected to follow suit shortly. Blockchain data corroborates this transfer, with a significant issuance of $79.3 million in BUIDL tokens observed.

The Ondo Finance Team expressed enthusiasm towards BlackRock’s venture into securities tokenization through the launch of BUIDL, particularly lauding its extensive collaboration with ecosystem participants. They believe this move not only validates their original concept of a tokenized US Treasury fund but also reinforces their belief that tokenization of conventional securities on public blockchains signifies the next pivotal phase in the evolution of financial markets.

BlackRock’s BUIDL fund is represented by an Ethereum-based token and is backed by US Treasury bills and repo agreements. It caters specifically to white-listed institutional clients, requiring a minimum investment of $5 million.

While this may limit direct participation from smaller investors, it opens up avenues for platforms like Ondo Finance to harness the fund for their retail offerings, effectively bridging the gap between traditional finance and the burgeoning cryptocurrency market.