Ondo Finance, Chainlink, and JP Morgan Execute First Public Blockchain Trade of U.S. Treasury Bonds

Ondo Finance has been at the forefront of integrating blockchain technology with traditional financial systems, particularly in the realm of asset tokenization. The company has recently partnered with Chainlink and JP Morgan’s Kinexys to revolutionize the way assets are tokenized and traded. This collaboration aims to enhance the efficiency of capital movement across traditional financial markets, marking a significant milestone for blockchain integration. The partnership involves the use of Chainlink’s Runtime Environment, which bridges the gap between legacy financial systems and blockchain networks, allowing for seamless integration and coordination among financial institutions, asset issuers, and regulatory bodies.

One of the key achievements of this partnership is the execution of the first public blockchain trade involving U.S. Treasury bonds on the Ondo ledger. This transaction was facilitated by Ondo Finance and involved short-term Treasuries backed by BlackRock’s USD Institutional Digital Liquidity Fund. The trade was processed via JPMorgan’s Onyx Digital Assets platform, which has previously been used for intraday repo settlements and transactions involving JPM Coin. This move highlights the growing acceptance of blockchain technologies in institutional finance, particularly following favorable regulatory changes in the United States.

Ondo Finance’s CEO, Nathan Allman, emphasized that the product targets entities that hold stablecoins, such as DAOs, Web3 firms, and crypto-native funds, which need reliable, low-risk instruments on-chain. By tokenizing Treasuries, these groups can deploy capital with predictable returns without converting into fiat or interacting with traditional banking infrastructure. This setup supports automated liquidity management, allowing protocols to rebalance reserves or execute yield strategies directly through smart contracts.

Over $1 billion worth of U.S. Treasuries has now been tokenized across public blockchains like Ethereum, Polygon, and Avalanche. These are part of a broader $22.1 billion market for real-world assets being brought on-chain. Franklin Templeton has issued tokenized Treasury funds on Stellar and Polygon, while WisdomTree uses its digital platform, WisdomTree Prime, to offer tokenized exposures to U.S. government securities. JPMorgan selected the Ondo ledger for its settlement speed, fee predictability, and regulatory focus, making it suitable for tokenized fixed-income products.

In April 2025, Ondo Finance and its legal counsel met with the SEC’s Crypto Task Force to present tokenization models that meet existing legal frameworks. Discussions included registration processes, broker-dealer compliance, and anti-money laundering standards. The SEC proposed exemptions to encourage the use of distributed ledger technology in securities markets, aiming to create regulatory clarity for blockchain-based asset issuance and trading. This transaction reflects a broader trend where large financial institutions are executing public trades involving regulated instruments and audited funds, aligning blockchain infrastructure with compliance requirements and operational needs.

On May 15, Sergey Nazarov, co-founder of Chainlink, expressed his enthusiasm about Chainlink’s collaboration through the X platform. Chainlink played a crucial role in the partnership between JP Morgan and Ondo Finance, aiming to execute a cross-chain, atomic Delivery versus Payment (DvP) test transaction. This landmark moment involved the exchange of tokenized assets for cash using two different blockchain environments, public and private, securely connected through Chainlink’s advanced infrastructure. The transaction marked the first use of the Chainlink Runtime Environment (CRE) to connect a permissioned private blockchain with a public one, enabling a seamless, secure, and compliant integration between Kinexys Digital Payments’ permissioned blockchain and Ondo Chain.

Nazarov emphasized the significance of this development, highlighting how Chainlink’s CRE played a vital role in connecting JP Morgan’s private chain with Ondo’s public chain for the Delivery vs Payment of Ondo’s tokenized U.S. Treasuries in exchange for payment on Kinexys. His reaction underlined the secure and rapid execution made possible by Chainlink’s technology. Nazarov also looked ahead, expressing confidence in further collaboration between major financial institutions and blockchain projects. The transaction involved the Ondo Short-Term U.S. Treasuries Fund (OUSG), a tokenized product providing exposure to short-term U.S. Treasury bonds, showcasing the efficiency and scalability of Ondo Chain’s new blockchain infrastructure, designed specifically for real-world asset tokenization.

Cross-chain Delivery versus Payment (DvP) is a settlement method that ensures payment and asset transfer occur simultaneously, mitigating risks tied to delayed or failed settlements. Traditional markets suffer significantly from such failures, with estimated losses reaching $914 billion. Using blockchain technology, the new model demonstrated by Kinexys, Chainlink, and Ondo can eliminate counterparty risk and settlement delays. This collaboration sets a precedent for future institutional-grade blockchain use cases, making it possible for different blockchains to talk to each other while Kinexys handles regulated payments on its secure network, creating a reliable system that more financial institutions can now start using.

On May 15, Ondo Finance launched an all-day conversion service between OUSG and PayPal USD (PYUSD). OUSG (Ondo Short-Term US Government Treasuries) is a tokenized financial product launched by Ondo Finance, providing investors with exposure to short-term US government bonds. PYUSD is a US dollar stablecoin issued by PayPal. This service allows for seamless conversion between these two financial instruments, further enhancing the liquidity and accessibility of tokenized assets in the market.