Author: Claude, Deep Tide TechFlow
Deep Tide Introduction: On July 2nd, Ondo Finance announced the tokenization of BlackRock's S&P 500 ETF (IVV) and Micron stock, becoming the first practical implementation of the "third-party custody model" proposed by the SEC in January of this year. The underlying stocks remain within the traditional custody system, and token holders can exercise voting rights through Broadridge. However, the products are not yet available to US investors, and the SEC staff statement does not constitute formal rules.
Tokenized stocks in the US finally have a version that received a regulatory nod.
According to CoinDesk, Ondo Finance announced on July 2nd the issuance of tokenized versions of BlackRock's S&P 500 ETF (IVV) and Micron Technology (MU) stock on Ethereum. This is the first production deployment of the "third-party custody model" since the SEC issued a staff statement on tokenized securities in January, and also marks the first time a US-listed security has been tokenized by a third party without leaving the country or circumventing through an offshore structure.
In a statement, Ondo CEO Ian De Bode said, "Today's milestone demonstrates that we can tokenize securities in a way that meets both market and regulatory requirements, serving US and global investors, and laying the groundwork for more US investors to participate in on-chain investments."
The First Batch of Assets Chosen Are Two of the Most Mainstream
The two assets chosen for tokenization are not obscure. IVV is BlackRock's flagship ETF tracking the S&P 500, while Micron is a star stock in the current memory chip cycle. By using a broad-based ETF and a hot tech stock to validate the new model, Ondo's intent is clear: first prove that "mainstream assets can also be brought on-chain in a compliant manner."
In terms of the specific structure, the underlying IVV and Micron shares remain within the US traditional custody chain, held by regulated custodians. Oasis Pro TA, an SEC-registered transfer agent acquired by Ondo last year, mints corresponding tokens on Ethereum at a 1:1 ratio. Transfer restrictions are enforced jointly by participating broker-dealers, transfer agents, and custodians.
According to Ondo, its overseas Global Markets platform has already tokenized over $1 billion worth of stocks and ETFs, covering more than 430 securities, ranking first in the industry by total value of tokenized securities. This is the company's first extension of its business into the domestic US framework.
Fundamentally Different from the OpenAI-Contradicted Robinhood Model
For the average investor, the real question worth asking about this launch is whether the purchased tokenized stock counts as equity.
Last year, this issue caused controversy. After Robinhood launched tokenized products in Europe linked to OpenAI shares, OpenAI publicly stated it had not authorized the products and warned that the tokens did not represent equity in the company. Those products belonged to a "synthetic model," where the issuer had no relationship with the underlying company, and investors only gained price exposure without shareholder status.
The SEC's staff statement in January offered another path. Under the third-party custody model, a regulated intermediary holds the real stock and issues on-chain tokens representing the holder's rights. According to The Block, Ondo's product is built precisely around this framework, where token holders receive the same shareholder rights and protections as investors in traditional brokerage accounts, including issuer notifications and on-chain proxy voting.
Put in portfolio terms, this difference means that tokens under the custody model have real shares, voting rights, and information disclosure backing them, while the synthetic model only offers a price shadow.
Wall Street Veteran Infrastructure Player Broadridge Steps In to Handle Voting
Another signal from this launch is the deep involvement of traditional financial infrastructure.
Broadridge (NYSE ticker BR) is an infrastructure giant in the US shareholder communication and proxy voting space, with a large portion of shareholder voting for US-listed companies running on its ProxyVote.com platform. In this partnership, Broadridge is responsible for providing proxy voting, regulatory disclosure, and shareholder communication services to Ondo's token holders, who can participate in voting directly on-chain.
In a statement, Doug DeSchutter, President of Broadridge's Investor Communication Solutions business, said, "By providing proxy voting, issuer communications, and regulatory disclosure for Ondo's token holders, we are delivering on our promise to provide complete, trusted governance capabilities to both investors and issuers, regardless of the structure in which assets are held."
The tokenization space has seen frequent moves recently. Robinhood launched its own public blockchain and expanded tokenized stocks beyond Europe on July 1st; the DTCC (Depository Trust & Clearing Corporation) announced in May that it would bring tokenized assets to the Stellar chain; Nasdaq received SEC approval in March to trade tokenized securities; and the NYSE has also announced related plans. According to a Citigroup report cited by CoinDesk in June, the market size for tokenized securities could reach $5.5 trillion by 2030.
Not Open to US Investors Yet; Two Risk Points to Note First
For interested readers, two points require a dose of cold water first.
First, according to CoinDesk, the product is not yet available to US investors. Ondo's current move is more about validating the architecture's feasibility; the actual timeline for opening to US retail investors is undetermined.
Second, the SEC's January statement is a staff statement, representing only the thinking direction of regulatory personnel and does not carry the force of formally adopted rules by the Commission. In other words, the compliance status of this model remains subject to potential modification by subsequent formal rules.
For ONDO token holders, as of the time of writing, ONDO is trading at around $0.33, up about 4% in 24 hours. The direct impact of the news on the token price is limited. The mid-term logic depends on when US investors can actually buy these products and whether the custody model can expand from two assets to the more than 430 securities on Ondo's overseas platform. Until these two milestones are reached, the significance of this launch lies primarily on the regulatory front, rather than the revenue front.
