Ondo Finance Demands Clarity on Nasdaq’s Tokenized Stock Proposal

Ondo Finance, a startup focused on bringing real-world assets onto blockchain, has raised concerns over Nasdaq’s proposal to introduce tokenized versions of stocks and ETFs.

The company is urging the Securities and Exchange Commission (SEC) to obtain more details about how these digital securities would be settled.

According to the information Nasdaq has suggested using the Depository Trust Company (DTC), a major clearinghouse, to handle tokenized stock transactions. However, Ondo Finance believes that key questions remain unanswered and that the SEC should carefully review the plan before granting approval. “Tokenization has the potential to transform finance, but it must advance through clear standards and collaboration,” the startup said in a statement.

The company currently manages blockchain-based versions of real-world financial instruments, including money market funds, U.S. government securities, and equities. Ondo has ties to the Trump-backed World Liberty Financial Project, which holds ONDO tokens for strategic purposes.

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Industry watchers note that Nasdaq’s filing emphasizes that tokenized stocks could operate without sacrificing traditional investor protections. Still, Ondo’s concerns highlight a broader debate about how blockchain innovations should integrate with existing market infrastructure.
SEC Commissioner Hester Peirce has indicated that tokenization is a priority for the regulator. At the same time, critics like Benjamin Schiffrin from Better Markets warn that investor safeguards could be at risk if the agency grants special exemptions for tokenized securities.

Schiffrin stressed that the SEC’s core responsibility is protecting investors, not merely accommodating the ambitions of crypto companies.
As tokenization gains momentum, Ondo Finance’s call for transparency underscores the need for careful planning and regulatory oversight, ensuring that new blockchain-based financial products are safe, accessible, and properly integrated into the existing market framework.

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