In current news, Ondo Finance has been making headlines with its letter, in which it urged the U.S. Securities and Exchange Commission (SEC) to pause Nasdaq’s new plan to let people trade tokenized stocks – digital versions of real company shares.
In its letter, Ondo Finance to SEC, the company said the proposal is not ready yet because important details about how tokenized trades will be settled are still missing.
Source: OndoFinance
What’s Going On? Why Ondo-Finance Is Warning the SEC?
Nasdaq, the US based world’s second largest stock exchange, wants to update its rule so that investors can trade real company stocks, like Apple or Tesla, as digital tokens recorded on a blockchain. The idea aims to bring traditional equities into the digital world, allowing faster and more transparent trading.
However, Ondo Finance has urged the SEC to pause the plan, saying it relies too heavily on the Depository Trust Company (DTC), which handles the final steps of all stock trades in the U.S. Ondo-pointed out that there’s no clarity on how DTC would process tokenized transactions.
The company warned that moving forward without full details could give large Wall Street firms an unfair advantage over smaller blockchain projects. Ondo stressed that tokenized trading rules must be open, fair, and clearly defined before such systems go live.
Who Is Ondo Finance?
Ondo Finance is a blockchain company that runs traditional financial assets, like U.S. Treasury bills and ETFs, into digital tokens that can be traded online. Some of its key products include:
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OUSG, tokens backed by short-term U.S. Treasuries
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USDY, a yield-bearing stable token backed by Treasuries and cash
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Ondo-Global Markets (OGM), tokenized U.S. stocks and ETFs for investors outside the U.S.
The organisation said it supports the idea of tokenization and wants innovation to move forward, but only if the process is transparent and fair for all participants, not just large financial institutions.
What the Firm Wants the SEC To Do
Ondo has asked the Exchange Commission to delay or reject Nasdaq’s proposal unit DTC shares full details about how it will manage settlements for tokenized assets. The firm said it would support the plan once the information is made public, stressing that transparency is key as markets move into blockchain-based finance.
If approved, Nasdaq’s plan would allow tokenized-versions of real stocks to trade on a regulated exchange for the first time, bridging traditional markets with digital assets.
However, moving too fast concerns about the favour to large Wall Street firms and limit competition for smaller blockchain companies. The SEC is reviewing the filing and will decide whether to approve, delay, or request more information from DTC.
