Ondo Finance Brings BlackRock ETF and Micron Shares On-Chain Under SEC Custodial Framework

Ondo Finance has launched blockchain-based versions of BlackRock's iShares Core S&P 500 ETF (IVV) and Micron Technology (MU) shares on Ethereum, marking the first production deployment of the SEC's third-party custodial tokenization model outlined by the regulator earlier this year. The structure is designed to operate within the existing U.S. securities framework, though the product is not yet available to U.S. investors.

The tokenized securities are issued on Ethereum through Oasis Pro TA, an SEC-registered transfer agent that Ondo acquired last year. Oasis Pro TA mints one-for-one tokenized entitlements representing holders' rights to the underlying assets, while regulated custodians continue to hold the conventional shares within the traditional U.S. custody chain.

Financial infrastructure provider Broadridge (BR) is integrated into the structure to handle proxy voting, regulatory disclosures, and shareholder communications. This allows token holders to receive the same governance rights — including proxy materials and voting rights — as investors who hold the securities through conventional brokerage accounts.

Under the SEC's third-party custodial model, first outlined in a January staff statement, a regulated intermediary holds standard shares in custody and issues blockchain tokens representing a holder's entitlement to those assets. The approach differs from issuer-sponsored tokenization, where the company behind the underlying security participates directly in the tokenization process. While SEC staff statements do not carry the weight of formal guidance approved by commissioners, they signal how the regulator is approaching emerging issues such as tokenization.

Existing broker-dealer, transfer agent, and custody controls enforce transfer restrictions on the tokenized securities, keeping the product anchored within current regulatory requirements. Broadridge's integration leverages its existing investor services infrastructure to extend shareholder rights to on-chain holders.

Ondo CEO Ian De Bode said in a statement: 'Ondo has built the regulatory, product, and service infrastructure to support all major models within the United States. Today's milestone shows we can tokenize securities in ways that meet both market and regulatory requirements, for U.S. and global investors and provides a strong foundation for our expanding access to onchain investments for more U.S. investors.'

The launch arrives amid accelerating momentum in the tokenized equities space across both crypto-native and traditional finance institutions. Robinhood recently rolled out its own blockchain and expanded tokenized stock offerings beyond Europe. The Depository Trust & Clearing Corporation (DTCC) has expanded blockchain-based infrastructure, while Nasdaq and the New York Stock Exchange (NYSE) have each announced tokenization initiatives aimed at integrating blockchain technology into regulated securities markets.

The broader tokenization market has attracted significant institutional attention. A report by Citi projected that tokenized securities could reach a market size of $5.5 trillion by 2030. Supporters argue that blockchain-based securities can modernize capital markets through faster settlement, around-the-clock trading, and easier movement of assets across financial platforms.

The Ondo announcement also follows a public debate over whether tokenized stocks issued without issuer involvement confer the same rights as traditional shares. The issue drew widespread attention after OpenAI stated last year that it had not authorized Robinhood's tokenized offering tied to its shares and cautioned that the tokens did not represent equity in the company. Ondo's implementation directly addresses this concern by operating within the SEC's custodial framework and maintaining full integration with regulated intermediaries throughout the custody chain.

Ondo Finance has established itself as one of the largest players in the tokenized securities sector. Its ONDO token was trading at $0.3302 at the time of the announcement. The company's dual use of IVV and Micron shares is intended to demonstrate that blockchain-based securities of different types — an ETF and an individual stock — can both be accommodated within the current U.S. regulatory and custody infrastructure.