Ondo Finance purchased $25 million of the yield-stablecoin YLDS issued by Figure Technology Solutions to diversify the asset backing of its tokenized U.S. Treasury bond fund.
The company announced on Monday that YLDS will be added to its reserve portfolio, which already includes tokenized treasury products from major asset management companies such as funds issued by BlackRock, Fidelity, Franklin Templeton, and WisdomTree.
For institutional investors, the Ondo Short-Term U.S. Government Bond Fund (OUSG) offers 24/7 redeemable on-chain treasury bonds with an expected annual yield of 3.68%. Currently, the total locked value (TVL) of this tokenized fund is approximately $777 million.
Figure operates lending and capital market infrastructure on the Provenance blockchain, having issued over $19 billion in loans for home equity lines of credit, mortgage products, and crypto-backed loans. Subsequently, Figure completed its NASDAQ IPO. According to data from DefiLlama, its YLDS stablecoin has a market capitalization of approximately $100 million.
Ondo Finance, established in the U.S. in 2021, is a platform that tokenizes traditional financial assets. In October of this year, the company expanded its catalog of tokenized assets to the BNB Chain, adding over 100 tokenized Wall Street stocks and exchange-traded funds on-chain.
On Wednesday, the platform received regulatory approval from the Financial Market Authority (FMA) of Liechtenstein to offer tokenized stocks in Europe.
The momentum for crypto-backed loans is strong.
Globally, crypto-backed loans are becoming increasingly popular and are expected to accelerate in development by 2025. Block Earner launched Bitcoin-backed home loans in July, allowing borrowers to receive cash equivalent to half the property's value, with crypto collateral held by Fireblocks.
Stablecoin issuer Tether announced an investment in Ledn, a platform offering Bitcoin-backed consumer loans. Ledn reported in the third quarter that the total amount of its Bitcoin-backed loans issued exceeded $390 million.
At the same time, centralized exchanges are expanding their businesses, especially beyond Bitcoin. On Thursday, Coinbase launched Ethereum-backed loans for U.S. customers, allowing users to borrow up to $1 million in USDC by collateralizing their Ethereum holdings.
