# Open Letter to the HCFS: Tokenization Is Not the Future, It’s Already Here

Published: 2026-03-25T13:43:00.000Z

Tags: Announcement

URL: https://ondo.finance/blog/open-letter-hfsc-tokenization

---

Let’s Talk About Tokenization

The House Committee on Financial Services is meeting today to discuss tokenization, and we at Ondo Finance want to clarify one key point: This isn’t a theoretical conversation. Tokenized securities markets are here today and growing, particularly overseas.
The Ondo Stocks Model

The good news? The upgrade is live. With Ondo Stocks, regulated securities are on the blockchain and available outside the U.S. already - a practical bridge to true financial market efficiency. For those of us who value efficiency and transparency, the Ondo model offers three immediate, tangible upgrades compared to traditional securities markets:
Atomic Settlement: Forget T+1. We’re talking about near-instant trade settlement. This isn’t just great tech; it unlocks critical capital for investors that is currently trapped waiting for intermediaries to catch up.
Real Ownership and Self-Custody: Tokenization moves self-custody from a niche concept to a practical reality. You are empowered to be in control of your assets, just as you are with your crypto portfolio.
Transparent Oversight: The blockchain provides a shared, auditable ledger that enhances transparency, proving you can have speed and security at the same time.
The Race for Onshore Innovation

The key question for the House Financial Services Committee isn't if this technology will take hold, but when and how we ensure this crucial innovation continues to develop responsibly onshore, in the United States, under U.S. standards.

We’ve built a model that leverages the strength of U.S. capital markets without circumventing necessary regulatory oversight.

But we need legal clarity on the rules of the road for blockchain-based recordkeeping to ensure innovation develops responsibly onshore, for U.S. investors, under U.S. standards for investor protection and market integrity.
Our Letter to the HFSC

Read our full letter today to the House Committee on Financial Services—it’s time to move the future of finance out of the pilot phase. The upgrade is ready and waiting.
Open Letter to the House Committee on Financial Services:
Tokenization is Not the Future, It’s Already Here

To: Chairman Hill, Ranking Member Waters, and Members of the Committee

As you convene the hearing "Tokenization and the Future of Securities: Modernizing Our Capital Markets," we at Ondo Finance welcome the Committee’s focus on this important evolution in financial market infrastructure. We support the Committee’s efforts to promote innovation while maintaining strong investor protections, market integrity, and financial stability.

While much of the regulatory and policy dialogue regarding tokenization has focused on native tokenization—the issuance of new assets directly onto a blockchain—we believe that policymakers should devote their attention to wrapped tokenization. This “wrapped” model—where existing, regulated securities are brought onto the blockchain—is not only a proven model used by stablecoins, but it is also the primary way the vast majority of investors interact with tokenized assets today. It represents a bridge between traditional stability and blockchain efficiency that is already live, regulated, and scaling globally through platforms such as Ondo Stocks, which is rapidly growing outside the United States, including in the European Union with its approved EU base prospectus.

As policymakers evaluate the many applications of tokenization in securities markets, it is important to recognize that there is broad consensus on the value of tokenization generally and that tokenized markets tied to U.S. securities are already operating globally today. Therefore, the key policy question is not whether this technology will develop, but when and how it will do so in the United States.

Set forth below are our views on several of the core themes of today’s hearing.
Achieving Atomic Settlement and Market Efficiency

The Committee is exploring how a transition to "atomic settlement" would change liquidity requirements. The move toward atomic settlement is crucial for unlocking capital efficiency.
Proven Efficiency: Ondo Stocks provides one example of how tokenized systems can facilitate near-instant settlement for tokenized U.S. stocks and ETFs. These models illustrate how blockchain-based infrastructure can reduce settlement timelines compared to traditional processes involving multiple intermediaries.
Transparent Oversight: Blockchain-based recordkeeping can also enhance transparency and streamline certain compliance and reconciliation processes by providing a shared, auditable ledger.
Legal Certainty and Investor Protection

The Committee rightly distinguishes between issuer-sponsored tokens and "wrapped" synthetic products that carry counterparty risk. Investor protection begins with legal clarity.
Tokenization Models: Tokenization structures vary, and it is important for policymakers to distinguish between products that confer direct ownership rights in underlying securities, those that provide full backing and security interests in underlying securities, and those that merely track price exposure.
Legal Certainty: Certain tokenization structures are designed to provide holders with legal and beneficial interests in securities through compliant issuance frameworks that make structures pioneered for wealthy investors more widely available.
Investor Rights: Ondo’s tokenized share structures are designed so that holders maintain many of the same enforceable rights as traditional holders, including dividend rights and claims in bankruptcy.
Restoring U.S. Leadership in Digital Asset Innovation

Chairman Atkins has noted that much innovation remains offshore due to domestic hurdles.
Bridging the Gap: Ondo Finance has built a bridge that leverages the deep strength of U.S. capital markets without circumventing necessary regulatory oversight.
Current Market Activity: While a number of U.S. market participants are exploring tokenization through pilots and proposed rule changes, tokenized markets tied to U.S. securities are already active – and subject to regulator-approved public offerings – in other jurisdictions today. This dynamic underscores the importance of ensuring that U.S. regulatory frameworks can support responsible onshore development in a timely manner.

Policymakers should consider near-term steps to provide legal clarity for blockchain-based recordkeeping, support multiple models of tokenization, and ensure that emerging markets can develop within U.S. regulatory oversight rather than exclusively offshore.
Empowering Investors: Responsible Disintermediation and Self-Custody

The Committee asks if disintermediated trading presents the same risks as traditional trading.
Empowering Investors: Tokenization transforms self-custody from a technical concept into a practical, accessible option for investors, putting them in control of their assets.
Streamlined Oversight: We agree with Commissioner Peirce that tokenization can enable more streamlined transaction processes by reducing reliance on certain intermediaries, while still maintaining appropriate safeguards.
Automated Compliance: Ondo utilizes smart contracts, "whitelisting" of wallets to mint and redeem tokens, and secondary market monitoring to manage AML and sanctions compliance. This approach enables decentralized trading while maintaining rigorous oversight and compliance with applicable regulatory requirements.
Our Conclusion

The opportunity for the U.S. to cement its position as the global leader in modern finance is immediate. As tokenized markets continue to develop globally, policymakers have an important role to play in ensuring that this innovation occurs both promptly and deliberately, and within a framework that upholds U.S. standards for investor protection, transparency, and market integrity. We would welcome the opportunity to serve as a resource to the Committee as it continues its work in this area, and to share additional perspectives based on real-world experience with tokenized financial products.

Read the full letter