Ripple has partnered with Ondo Finance to introduce tokenized US treasuries on the XRP ledger, revolutionizing institutional-grade DeFi. The collaboration will give institutional investors unparalleled security, liquidity, and access to short-term US Treasury investments.
According to a blog post by the token developer, investors in the program will be able to redeem Ondo Finance’s OUSG token using Ripple’s recently launched RLUSD stablecoin. This announcement follows the company’s allocation of at least $10 million in tokenized treasury bills issued by OpenEden.
Introducing Institutional-Level DeFi to the Blockchain Scene
The statement explained that the move will enable institutional investors on XPRL to access a secure yield-bearing asset backed by the high-quality tokenized US Treasuries. Given the rigorous KYC/AML regime that is in place, experts believe OUSG will bring institutional-level DeFi to the blockchain scene so users can invest in tokenized real-world assets with compliance. The statement by Ripple said:
“Through this collaboration, institutional investors will gain access to Ondo Short-Term U.S. Government Treasuries (OUSG), backed by the Blackrock USD Institutional Digital Liquidity Fund (BUIDL), which can be instantaneously minted and redeemed 24/7 using Ripple USD (RLUSD), an enterprise-grade, USD-denominated stablecoin.”
The ability to redeem a Tokenized US Treasury OUSG is a Key
A large amount of the OUSG portfolio is backed by BlackRock USD Institutional Liquidity Fund (BUIDL), introduced in March 2024 and supported by short-term bonds. Last November, BlackRock extended its reach beyond Ethereum by announcing it would help more blockchains. The OUSG token has a current value of $184.08 million in total value locked (TVL). The token runs on the Ethereum, Polygon, and Solana blockchains. The XPR ledger integration is expected to materialize over the next six months.
The ability to redeem a Tokenized US Treasury OUSG through Ripple’s RLUSD stablecoin is a key feature of the partnership. This will introduce a seamless operation that will enable users to enjoy financial flexibility outside the traditional timed financial limitations. Moreover, XRPL’s high throughput, low fees, and high-level institutional ties will make it the ideal platform for introducing tokenized RWAs like OUSG.
XRP Ledger Has A State-Of-The-Art Design
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Notably, the token’s compliance features will provide a robust environment that promotes regulatory compliance. On its side, OUSG will ensure institutional investors can access safe, low-risk investment options backed by the BlackRock USD Institutional Digital Liquidity Fund (BUIDL).
The initiative by Ripple to invest in tokenized US treasuries is one way the company is seeking to enhance the adoption of RWAs on blockchain platforms. Tokenized US treasuries such as OUSG have attracted institutional investors recently because of their ability to provide liquidity, transparency, and efficiency. The XRP ledger boasts of the state-of-the-art design of XRPL’s infrastructure, which it believes will facilitate a secure and reliable environment.
Conclusion
Since August 2024, when OpenEden launched its tokenized US treasury on the XRP ledger, the firm has been integrating traditional finance assets within its blockchain. Ripple is said to have invested over $10 million in the program as part of its long-term strategy to support RWAs. Now, with the partnership with Ondo Finance, the introduction of OUSG tokenized US treasuries via the XRP ledger is expected to push the boundaries of institutional DeFi even further and shape the future of treasury management on the blockchain.
Frequently Asked Questions (FAQs)
What does tokenizing US Treasuries aim to achieve?
Tokenization aims to make US treasuries more accessible to many more investors through fractional ownership and lower transaction costs through blockchain technology.
How does it work?
When a US treasury is tokenized, every unit represents a digital token on a blockchain. All the ownership and transfer details are recorded on a transparent and secure distributed ledger.
Who issues tokenized US Treasuries?
They are issued by private companies that create tokenized representations of the existing US Treasuries.
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