Ondo Finance CEO Sees Stablecoins Driving Tokenization Wave

Ondo Finance CEO Nathan Allman has highlighted the growing attention to stablecoins as a catalyst for a new wave of on-chain assets. The successful IPO of Circle has generated significant buzz around the blockchain space, according to Allman. He believes that stablecoins are just the beginning and that other large, liquid assets will follow a similar path to tokenization.

Allman noted that while there have been numerous attempts to tokenize private markets, the process requires extensive automation, digitization, and standardization of documentation before tokenization can truly enhance accessibility. He acknowledged that firms like BlackRock and Apollo Global Management are working to increase liquidity around private asset classes, which will facilitate broader tokenization adoption in the future.

Allman emphasized that the vast majority of regulated financial assets will eventually settle on blockchain rails, a prediction he considers reasonable. He also discussed the benefits of tokenization, including efficiency gains through reduced settlement times and enabling on-chain programmability. However, he believes that the most significant benefit demonstrated by stablecoins is the expansion of global accessibility, particularly in regions like Latin America, Turkey, and parts of Asia-Pacific.

Ondo Finance, like other companies such as BlackRock and Franklin Templeton, offers on-chain access to tokenized Treasurys. The company's tokenization platform, set to launch next month, aims to provide applications and wallets with exposure to US publicly traded stocks, bonds, and ETFs. Allman also mentioned that while working at Goldman Sachs, his team explored tokenization for syndicated loans, which can take weeks to settle.

Allman expressed optimism about the regulatory environment in the US, stating that the SEC is open-minded and willing to engage with the industry. He believes that there will be a path for bringing tokenized US public securities to the US market, although the specific path has not yet been determined. Ondo Finance seeks to differentiate itself from traditional players by building a vertically-integrated platform that includes not just the tokenized assets but also the infrastructure and protocols to create utility and distribution around those assets.