Ondo Finance plans to expand its tokenized fund, OUSG, to the XRP Ledger

Ondo Finance, a decentralized finance (DeFi) platform backed by Founders Fund and Pantera Capital, has announced plans to expand its tokenized U.S. Treasuries fund, the Ondo Short-Term U.S. Government Treasuries Fund (OUSG), to Ripple’s XRP Ledger (XRPL). The move, slated to go live within the next six months, will see Ondo collaborate with Ripple, the creator of the XRP Ledger, to bring its institutional-grade tokenized product to the blockchain.

According to Ondo Finance, the expansion is designed to enhance institutional adoption of compliance-focused DeFi products. By leveraging the XRP Ledger’s fast and low-cost transaction capabilities, the initiative aims to provide investors with access to tokenized U.S. Treasuries while benefiting from the composability and flexibility offered by decentralized finance. The OUSG fund is backed by BlackRock’s U.S. Treasuries fund, the USD Institutional Digital Liquidity Fund (BUIDL), further cementing its credibility and appeal to institutional investors.

The primary goal behind bringing OUSG to the XRPL is to make institutional-grade assets more accessible to a wider range of financial institutions. As Ondo Finance explained in a blog post, this move will allow institutions to interact with tokenized assets as flexible treasury management tools, making it easier to mint and redeem OUSG tokens on a 24/7 basis. Ripple and Ondo Finance have already secured commitments to seed the liquidity for the fund at launch, further bolstering the liquidity needed to support the fund’s growth and adoption.

Ripple is also planning to integrate its stablecoin, RLUSD, with OUSG on the XRP Ledger. This integration will provide enhanced interoperability, enabling instant redemption of the tokenized fund and further enhancing its utility within the XRP ecosystem.

Tokenized real-world assets (RWAs) have seen substantial growth over the past year, with major financial institutions like BlackRock, Franklin Templeton, and Hashnote playing pivotal roles in the market. The market for tokenized RWAs currently stands at over $3.5 billion, reflecting the increasing demand for blockchain-based solutions in traditional finance. Ondo’s decision to bring OUSG to the XRPL is part of a broader trend of financial institutions seeking to leverage blockchain technology for more efficient and transparent management of real-world assets.

This announcement follows Ripple’s earlier plans to allocate up to $10 million into tokenized U.S. Treasuries on the XRP Ledger, signaling the company’s commitment to expanding its footprint in the tokenized asset space. Ripple has also collaborated with OpenEden, a prominent Asia-based tokenization platform, to deploy TBILL tokens on the XRP Ledger, further reinforcing the XRP Ledger’s role as a key platform for tokenized asset innovation.

With the launch of OUSG on the XRP Ledger, Ondo Finance is positioning itself at the forefront of tokenized asset adoption within the DeFi and blockchain space, aiming to bridge the gap between traditional finance and the growing world of decentralized finance. As the project moves forward, it will likely play a crucial role in the evolution of tokenized real-world assets, bringing more institutional players into the rapidly expanding blockchain ecosystem.