Ondo Finance to Move $95M to BlackRock’s Tokenized Fund for Instant Settlements for Its T-Bill Token

• Ondo Finance is shifting backing assets of its OUSG token to BlackRock’s BUIDL tokenized fund from a less desirable short-term Treasury bond ETF.

• OUSG “will become significantly more usable” with instant, around-the-clock subscriptions and redemptions, Ondo Finance CEO said.

Tokenized real-world asset (RWA) platform Ondo Finance is moving $95 million of assets to BlackRock’s brand-new tokenized fund BUIDL to allow instant settlements for its own U.S. Treasury-backed token (OUSG), Nathan Allman, CEO of Ondo Finance, said Wednesday in a Telegram interview with CoinDesk.

Until now, Ondo’s OUSG token was backed by BlackRock’s iShares Short Treasury Bond exchange-traded fund (ETF), which traded only during traditional market hours, opposite to crypto’s around-the-clock nature. The allocation allows Ondo to significantly speed up subscription and redemption time to instant settlement at any day from the T+2 days, an Ondo blog post read.

“Many investors have been so far hesitant to use OUSG because of the time it used to take to redeem, and given the 24/7/365 and volatile nature of crypto markets and the often sudden need for capital that arises from that,” Allman said in the interview. “OUSG will become significantly more usable as a store-of-value and collateral asset within the crypto ecosystem.”

Ondo has already transferred $15 million of OUSG backing assets to BlackRock’s BUIDL over the past days, and plans to move another $80 million by the end of Wednesday, Allman added. Blockchain data shows that someone minted $79.3 million of BUIDL tokens at 18:49 UTC, which Allman confirmed it was Ondo.

Ondo’s action marks the first example of a crypto protocol leveraging asset management giant BlackRock’s tokenized fund offering, which debuted last week. The fund, represented by the Ethereum-based BUIDL token backed by U.S. Treasury bills and repo agreements, is targeted for white-listed, institutional clients and requires at least $5 million minimum allocation. While the strict requirements prohibits smaller investors to invest in BlackRock’s BUIDL, it allows other platforms such as Ondo to leverage the fund for its own retail-facing offerings.

UPDATE (March 27, 21:28 UTC): Adds detail that Ondo’s $80 million transfer happened.