DeFi

Ondo Finance Helps Stablecoin Holders More Investment Options In US Government Bond

Holders of stablecoins can now invest in bonds and US Treasury securities thanks to a tokenized fund developed by Ondo Finance, making traditional capital markets more accessible to investors who collectively hold more than $100 billion of non-yield-bearing stablecoins.

Investors will obtain tokenized fund interests that may be transferred using permitted smart contracts and other on-chain means. Ondo founder and CEO Nathan Allman announced the news on Twitter:

US Government Bond Fund (OUSG), Short-Term Investment Grade Bond Fund (OSTB), and. High Yield Corporate Bond Fund (OHYG) are three of the institutional-grade yield offers that Ondo Finance will offer upon launch. There are three separate share classes available at launch:

OUSG will invest exclusively in short-term US treasuries, initially via the Blackrock US Treasuries ETF (SHV)
OSTB will invest in short-term investment-grade corporate bonds, initially via the PIMCO Enhanced Short Maturity Active ETF (MINT)
OHYG will invest in high-yield corporate bonds, initially via the Blackrock iBoxx $ High Yield Corporate Bond ETF (HYG).

The investment adviser supporting the buying and selling of these ETFs will be Ondo Capital Management. A management fee of 0.15% will be charged annually by Ondo Finance Inc.

Ondo said that it only collaborates with highly regulated third-party service providers and keeps assets with authorized, bankruptcy-remote custodians.

The prime broker for the fund is Clear Street, which will also hold the fund’s securities in escrow in an account with the DTC. Any stablecoins that the fund owns will be held in custody by Coinbase Custody, and Coinbase Prime will handle conversions between stablecoins and fiat. Richey May will act as the fund’s auditor and tax advisor, while NAV Consulting will administer the fund and keep track of capital accounts for investors.

Stablecoins (or fiat) can be used as a form of payment for Ondo I LP investors, who will receive tokens signifying their ownership in the fund. To modify who owns which funds, they can transfer these tokens among themselves. Smart contracts can also be used by investors to simplify their financial arrangements.

Transfer limitations built into the tokens themselves will prevent them from falling into the hands of anyone ineligible to invest in the fund. To ensure that smart contracts are not being used to circumvent these transfer limits, the fund must approve their usage before investors can utilize them. Ondo Finance Inc. oversees the tokenization.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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Harold

Coincu News

Harold

With a passion for untangling the complexities of the financial world, I've spent over four years in financial journalism, covering everything from traditional equities to the cutting edge of venture capital. "The financial markets are a fascinating puzzle," I often say, "and I love helping people make sense of them." That's what drives me to bring clear and insightful financial journalism to the readers of Coincu.