Ondo, JPMorgan, Ripple and MasterCard Join Hands to Settle Tokenized Treasuries on XRP Ledger

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Ondo Finance has completed a “near real-time” cross-border and cross-bank redemption of a tokenized U.S. Treasury fund with Ripple, MasterCard, and JPMorgan’s blockchain infrastructure platform Kinexys.

The tokenized real-world assets (RWA) platform said on Wednesday that this successful pilot was the first such transaction in history. Importantly, the move has established “a framework for 24/7, near real-time cross-border settlement across global banks for tokenized asset redemption.”

Therefore, the framework allows for continuous coordination between various transacting parties on public blockchains and the global banking infrastructure. This “unified transaction flow” has the blockchain execution and traditional bank settlement operating together, rather than as separate entities.

Speaking of which, besides XPRIL, the framework supports redemptions from any public blockchain. The only condition is that OUSG is issued on it, the announcement says. OUSG is Ondo’s tokenized U.S. Treasury fund, which the companies utilized in the pilot.

TradFi Interacting Onchain

The transaction required a close cooperation between the collaborators, as well as between two entirely separate ecosystems, to be able to execute a blockchain-powered cross-border transfer outside traditional cut-off windows. The announcement explains that the blockchain was the host for a part of the process, while bank infrastructure hosted the other part.

Moreover, to go into more detail, Ripple redeemed a portion of its Ondo Short-Term U.S. Government Treasuries (OUSG) holdings on the XRP Ledger (XRPL).  Then, Ondo processed the redemption and initiated a fiat payout instruction via the MasterCard Multi-Token Network (MTN). This network allows interoperability between onchain assets and traditional fiat, on the one hand and, on the other, for TradFi institutions to interact with onchain commerce, the companies write.

Finally, the fiat settlement execution was initiated on Kinexys by J.P. Morgan’s blockchain infrastructure. It continued the instruction to J.P. Morgan’s banking network for cross-border fund delivery. “Kinexys debited Ondo’s Blockchain Deposit Account and settled U.S. dollar proceeds to Ripple’s bank account in Singapore via its correspondent banking network,” the companies said.

“To see widespread adoption of tokenized financial products, we need wholesale cross-industry collaboration across geographies, global banking infrastructure and public blockchains,” commented Zack Chestnut, Global Head of Commercialization at Kinexys.