Ondo Finance (ONDO) Partners With MasterCard and Joins the Multi-Token Network (MTN)

Ondo Finance has announced a strategic collaboration with card payment giant MasterCard. In a Wednesday tweet, the DeFi protocol announced it had joined MasterCard’s Multi-Token Network (MTN), becoming the only RWA provider in the network.

The recent collaboration will see businesses in MasterCard’s MTN access US tokenized governmental bonds on Ondo’s Short-Term US Treasuries Fund (OUSG). The credit card firm will allow firms in the multi-token network to interact with the OUSG, earning daily yield with its institution-grade flexible cash management.

Ondo to Bring Tokenized RWA Solutions to Businesses

The collaboration leverages blockchain technology to offer banks and businesses 24/7 access to tokenized US government bonds. While enhancing the Ondo Finance platform, the alliance aims to provide daily yield and flexible cash management, bridging traditional finance with on-chain solutions.

MasterCard designed the MTN to help financial institutions bridge the gap between traditional and blockchain payment systems, enabling swift cross-border transactions. Hence, the alliance will decimate the complexity of holding tokenized bonds, allowing businesses to hold OUSG through simple payments with MasterCard.

Meanwhile, Ondo has yet to register the OUSG under the US Securities Act 1933. The RWA-focused protocol clarified that its Short Term US Treasuries Fund is not an investment company under U.S. law.

As a result, OUSG is not a security, addressing regulatory concerns in tokenized asset markets. Nonetheless, the new development aligns with a broader tokenization trend in finance.

As seen in recent partnerships, Ondo’s assets were integrated into World Liberty Financial, signaling institutional adoption of blockchain for real-world assets.

All About the Multi-Token Network Integration

Following the February 26th announcement, Ondo’s Chief Strategy Officer, Ian De Bode, elaborated on MasterCard’s partnership with Ondo.

In a Thursday chat with MasterCard’s Newsroom, Bode highlighted that by migrating traditional assets, such as investment securities, onto the blockchain, Ondo will unlock a new level of efficiency and accessibility. This will enable transactions to occur around the clock without centralized intermediaries.

The shift allows automated transactions using smart contracts, streamlining processes and reducing reliance on traditional financial infrastructure. According to Bode, the flagship product tokenizes the U.S. Treasury, allowing seamless peer-to-peer transfers without needing a stock exchange.

These tokenized assets will offer a yield comparable to short-term Treasury rates, combined with robust investor protections. Ondo aims to bridge the gap between traditional finance and blockchain technology by creating a more inclusive and efficient financial ecosystem.

Ondo’s Partnership Brings 24/7 Banking to Institutions and Crypto Investors

Highlighting the key limitations of traditional bank infrastructure, Bode explained, “Bank infrastructure doesn’t operate 24/7; the blockchain does.”

That matters for time-sensitive transactions, such as overnight borrowing. Hence, the partnership is meaningful because it enables settlements across various banks around the clock, on traditional financial rails, and for many institutions.

Furthermore, the chief strategy officer highlighted the Ondo product’s similarities with ETFs. Bode emphasized the tokenized asset as akin to a money market fund, providing institutions with a short-term investment solution for their cash reserves.

Bode believes that by leveraging blockchain technology, Ondo has created a more fluid and flexible investment vehicle.

“Unlike traditional centralized exchanges, our assets can move freely, allowing for greater versatility and utility,” the chief strategy officer boasted.

Notably, accessing traditional Treasury yields has historically been challenging for crypto investors. Bode stated that Ondo addresses that by offering a blockchain-based investment product that provides typical Treasury yields.

In conclusion, Bode predicts a rapid shift of investment vehicles to blockchain, with tokenized stocks, ETFs, and on-chain borrowing emerging sooner than expected. Also, beyond crypto, stablecoins, and tokenized Treasuries, Bode believes that liquid assets from traditional exchanges will migrate to public blockchains at an accelerated pace.