Ondo Becomes First RWA Provider On Mastercard Multi-Token Network

Ondo Finance will be the first provider to bring real-world assets to Mastercard’s Multi-Token Network (MTN).

Announcing the effort Wednesday (Feb. 26), Ondo said its short-term U.S. government treasury fund (OUSG) — the first tokenized real-world asset (RWA) on the Mastercard network — will let businesses earn daily yield via tokenized assets with 24/7 subscriptions and redemptions, with no need for stablecoins onramps or settlement windows.

“This partnership represents a landmark moment of connecting private payment network rails to tokenized assets on public blockchain networks,” Ian De Bode, chief strategy officer of Ondo Finance, said in a news release. “This connectivity will enable the banking ecosystem to move to 24/7 functionality on a global basis, powered by Ondo’s assets and services.”

According to the release, the MTN allows banks to connect to applications built on the network digitally and can manage the increased complexities involved with domestic and cross-border commercial transactions, such as greater transparency, faster settlement and reducing time zone friction.

The companies say the integration of OUSG to the MTN marks one of the first live instances of connectivity between a private payments network and tokenized assets on public blockchains. Businesses on the MTN will get round-the-clock access to OUSG before payments are settled on traditional banking rails, with no need to set up additional crypto infrastructure or accounts.

“This makes access to tokenized treasuries via traditional cash balances instant and seamless, meaning complete, 24/7 cash management freedom,” the release said.

The announcement follows news from last month that Ondo was bringing tokenized U.S. Treasuries to the XRP Ledger, letting institutional investors access OUSG.

Writing about tokenized RWAs last year, PYMNTS pointed to their potential to make assets “more liquid, accessible and efficient” while also enhancing their transparency, security and global reach.

However, the tokenization of RWAs still faces obstacles, that report added, such as the absence of a widely interoperable infrastructure spanning the private and public payment spaces.

“The true intrinsic value of blockchain, which is around programmability of transactions, immutability of transactions, and the ability to do delivery versus payment and always-on types of payments, has yet to be unlocked,” Mastercard Chief Digital Officer Jorn Lambert told PYMNTS in in an interview last year.

“Until there exists the ability to actually develop financially regulated applications on the blockchain, the benefits will never go mainstream,” Lambert said. “Regulated financial institutions are crucial for [tokenized blockchain money movement vehicles] to truly scale.”