Ondo Finance is issuing tokens that track three BlackRock model portfolios of stock, bond and bitcoin ETFs. Buyers outside the U.S. can trade and borrow against them at any hour, but will not hold direct rights in the underlying funds.
The U.S. has just made room for tokenized stocks. BlackRock's newest tokenized products are skipping it for now.
Ondo Finance began selling seven tokenized model portfolios on Thursday. Three come from BlackRock, which built them in high-income, diversified growth and high-growth versions. Each blends ETFs that hold stocks, bonds and bitcoin in proportions set by its risk level. A buyer receives an Ondo token tied to one portfolio, and automated code on the blockchain buys the matching ETF shares behind it.
It is the first time BlackRock has built portfolios for another company to tokenize.
Access starts outside the United States, and it comes without shareholder rights. Token holders will not have a direct claim on the securities in the portfolio. What they get instead is flexibility: the tokens can be moved between wallets, pledged as collateral for loans and traded around the clock.
That trade-off lines up against the Securities and Exchange Commission's new rules. The agency has created two temporary innovation exemptions, each lasting five years, that let tokenized stocks trade in the U.S. Its guidance leaves out synthetic tokens and tracker tokens issued by third parties that offer only price exposure without the underlying equity's full rights. A portfolio token that carries no direct rights in the funds behind it appears to sit on the wrong side of that line for U.S. buyers, which may be part of why it is starting abroad.
The format BlackRock chose is a large one. Model portfolios, ready-made allocations that financial advisers use in place of picking investments themselves, reached $9.8 trillion in assets in June, up from $7.7 trillion a year earlier. In a Broadridge Financial Solutions poll of 400 advisers, 87% used them and a quarter relied on them entirely.
Ondo, which has about $3.9 billion in tokenized assets on its platform, is pitching the products to customers who want fund exposure in a crypto wallet instead of at a broker. "For a long time, many people in the world have not had access to BlackRock strategies," said John Hoffman, who leads its portfolio products.
The launch fits a pattern at BlackRock, whose chief executive, Larry Fink, has called tokenization the "next generation for markets." The firm put out a tokenized money-market fund in 2024 and holds a stake in Securitize. Competitors are moving too: the NYSE and Nasdaq are preparing tokenization platforms, and JPMorgan Chase and Invesco already offer tokenized funds.
Two versions of tokenized investing are taking shape. U.S. buyers can look forward to tokens that carry full shareholder rights under the SEC exemptions. Buyers abroad get tracking products with fewer rights and more freedom to move them. Any attempt by Ondo or BlackRock to bring a rights-bearing version to U.S. investors would show whether that split lasts.