Ondo Finance has completed what it describes as the first near real-time cross-border, cross-bank redemption of a tokenized US Treasury fund, conducted in collaboration with Kinexys by J.P. Morgan, Mastercard, and Ripple. The pilot establishes a framework for round-the-clock, near real-time cross-border settlement across global banks for tokenized asset redemption.
The transaction involved Ripple redeeming a portion of its Ondo Short-Term US Government Treasuries (OUSG) holdings on the XRP Ledger (XRPL), a public blockchain. Ondo processed the redemption and initiated a fiat payout instruction via the Mastercard Multi-Token Network (MTN), which routed the instruction to Kinexys by J.P. Morgan. Kinexys debited Ondo's Blockchain Deposit Account and settled USD proceeds to Ripple's bank account in Singapore via J.P. Morgan's correspondent banking network.
Bridging public blockchains and banking infrastructure
The transaction is structured so that one leg is settled on a public blockchain while the other is settled on traditional bank infrastructure. This integration is significant because redemption infrastructure for tokenized real-world assets has, until now, remained largely dependent on conventional wire systems, manual processes, and restricted operating hours tied to banking cut-off windows.
The Mastercard MTN is designed to enable interoperability between on-chain assets and traditional fiat money, allowing financial institutions to interact with on-chain commerce. By routing the fiat settlement instruction through Kinexys, the pilot demonstrated that blockchain-based asset redemption can trigger settlement without requiring separate manual instructions across siloed systems.
Kinexys by J.P. Morgan's Global Head of Commercialisation said the pilot represented an important step towards establishing a framework for institutional-scale tokenized asset markets, adding that widespread adoption of tokenized financial products would require cross-industry collaboration across geographies, global banking infrastructure, and public blockchains.
Mastercard's executive vice president for Blockchain and Digital Assets noted that institutional momentum around tokenized assets was shifting attention towards how tokenized commerce could operate at scale in real time, with the MTN designed to enable near real-time, cross-border settlement using existing bank accounts.
Implications for tokenized asset markets
The broader significance of the pilot lies in its architecture. The framework is designed to support redemptions from any public blockchain on which OUSG is issued, providing a replicable model for integrating tokenized assets with established financial networks. For tokenized financial products to operate at an institutional scale, settlement infrastructure must be capable of functioning across multiple banks and geographies outside standard operating windows.
The pilot brings together a public blockchain network, a multi-token interoperability layer, and a bank-grade settlement and correspondent banking infrastructure, representing a multi-party approach to a problem that has constrained the practical utility of tokenised real-world assets since the asset class began attracting institutional interest.
