Ondo launches tokenised US securities with Broadridge

Ondo Finance has launched tokenised versions of two US-listed securities in the United States, with Broadridge providing proxy voting and shareholder communications for token holders.

The launch covers BlackRock's iShares Core S&P 500 ETF and Micron shares. Ondo said the securities have been tokenised on the Ethereum blockchain under a custodial structure that keeps the underlying assets within the existing US custody system.

According to Ondo, the structure follows a model described by the US Securities and Exchange Commission for tokenised securities, in which a third party holds an issuer's securities and issues crypto assets representing an investor's entitlement to the underlying asset.

Under the arrangement, the underlying shares remain within the traditional regulated custody chain. Ondo's registered transfer agent mints tokens backed one-to-one by those shares, while regulated custodians hold the assets, and a participating broker-dealer, transfer agent and custodian enforce transfer restrictions.

Token holders will receive the same shareholder rights and protections as investors who hold the securities through US brokerage accounts, according to Ondo. Those rights include issuer communications, regulatory disclosures and proxy voting through Broadridge's ProxyVote.com platform.

Custodial model

The move marks Ondo's entry into the US market for third-party tokenised securities using a custodial model rather than synthetic exposure or direct issuer-led issuance. Ondo described the launch as the first production deployment in the US of that approach for publicly listed securities on a public blockchain.

Tokenised securities have generally developed either outside the US or through structures that rely on the issuing company's sponsorship. Ondo and Broadridge are positioning this model as one that fits within the existing regulatory and market framework while adding blockchain-based ownership records and transfer mechanisms.

Broadridge said its role is to provide a common voting and shareholder communications experience across both synthetic and custodial tokenised securities. In practice, token holders would access the same governance functions through the same platform used for conventional securities processing.

Ian De Bode, Chief Executive Officer of Ondo Finance, set out the company's broader approach in a statement accompanying the launch.

"Tokenised Securities in the U.S. are too often framed as a binary choice between competing models and tokenisation providers. This is a false premise. Ondo has built the regulatory, product, and service infrastructure to support all major models within the United States. Today's milestone shows we can tokenise 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," said De Bode.

Governance focus

Broadridge framed the partnership around governance and investor rights, areas that have often been less developed in early tokenised asset structures. It argued that tokenisation will need established systems for voting, disclosures and recordkeeping if it is to sit alongside mainstream securities infrastructure.

Doug DeSchutter, President of Broadridge's Investor Communication Solutions business, commented on the arrangement.

"Tokenisation will only scale when it delivers both innovation and investor confidence," said DeSchutter. "By enabling proxy voting, issuer communications, and regulatory disclosures for Ondo's token holders, we're living up to our promise to empower investors and issuers by providing them with the full range of trusted governance capabilities for tokenised securities regardless of how assets are structured."

The partnership also extends Broadridge's work across several tokenised security models. It already supports issuer-listed structures and synthetic tokenised securities issued outside the US, and now also supports third-party tokenised shares within the US.

Market backdrop

The launch comes as tokenisation firms try to connect blockchain-based assets with the legal and operational systems used in traditional capital markets. A central issue for the sector has been whether token holders can receive the same legal rights, communications and voting access as investors who own securities through standard brokerage and custody arrangements.

By keeping the shares in the established custody chain and issuing blockchain-based entitlements against them, Ondo is seeking to address that issue without moving the underlying securities outside regulated infrastructure. The use of a registered transfer agent and regulated custodians is intended to preserve existing controls around ownership records and transfer restrictions.

For the market, the significance lies less in the two securities themselves than in the operating model now being implemented. It tests whether tokenised access to listed US securities can be delivered under current rules while granting investors the same governance rights as conventional holdings.

The initial rollout covers two well-known listed instruments: BlackRock's iShares Core S&P 500 ETF, which tracks large-cap US equities, and Micron, the semiconductor company. Both serve as early examples of how tokenised securities might be offered to investors without changing the underlying mechanics of US securities custody and shareholder communications.