DeFi companies have warned that key details about tokenized payments remain private, raising questions about the fairness of the market.
Ondo Finance has published an open letter to the U.S. Securities and Exchange Commission (SEC) asking it to postpone approval of Nasdaq’s plan to trade tokenized securities until more details are known.
The team behind the decentralized finance protocol, which has a total value lock (TVL) of $1.7 billion, said the Nasdaq proposal relies on Depository Trust Companies (DTCs) devising a new system for tokenized payments, information that has not yet been made public.
If approved, Nasdaq’s proposal (filed on September 8) would mark the first time tokenized securities will be listed on a major U.S. exchange. But Ondo warned that proceeding without transparency could give large financial institutions an unfair advantage and make it difficult for startups to compete.
“New market rules must be built on clear public information available to all market participants in providing comments,” the letter says. “Without further information about how depository trust companies (DTCs) will treat tokenized payments, neither regulators nor market participants nor investors can adequately assess how this proposal will work.”
According to RWAxyz, tokenization, or turning stocks, bonds, and investment funds into digital assets, is growing rapidly, with the on-chain value of the real world assets (RWA) sector recently exceeding $34 billion, an increase of 10% in the last month.
The dispute highlights the challenges of adapting traditional financial (TradFi) systems to the expanding blockchain market. Ondo’s letter also highlights the need for clearer rules as Wall Street and crypto companies work to bring traditional assets on-chain.
“Raise the right flag”
Maja Vijinovic, CEO and co-founder of FG Nexus Digital Assets, told The Defiant that Ondo is “flying the right flag.” She said tokenization cannot be scaled up if “post-trade plumbing remains opaque.”
“DTC is effectively the exchange board for the US capital markets, and everyone has a right to know how DTC plans to connect to blockchain rails,” Vujinovic said. “If the DTC model is ultimately approved or shut down, tokenization will simply replicate Wall Street silos on-chain.”
He added that true innovation requires a transparent and interoperable payment layer.
“The important thing now is not to delay tokenization, but to get it right,” Vujinovic explained. “The question is whether the United States will build an open architecture or let one clearinghouse determine the rules of the future financial internet.”
others disagree
However, Eli Cohen, General Counsel of Centrifuge and Chief Compliance Officer of Anemoy, offered a different perspective.
“We are concerned that this could be seen as Ondo trying to maintain its existing OGM franchise for as long as possible without competition from Nasdaq,” Cohen said. OGM (Ondo Global Markets) is a platform launched by Ondo in February 2025 that aims to provide on-chain access to traditional assets such as stocks, bonds, and exchange-traded funds (ETFs).
At the same time, Cohen acknowledged that “more transparency” in DTC is needed to make the Nasdaq proposal viable. However, Cohen cautioned that regulatory delays are rarely in the crypto market’s best interests.
“Given the current political uncertainty, there is a good chance that a delay will mean that approval will not be granted,” he said. “Failure to approve large-scale tokenization efforts would be seen as a major setback for everyone in the space. Therefore, I do not agree that industry opposition to the SEC is helpful or productive.”
The letter comes weeks after Ondo rolled out a new platform that allows non-U.S. investors to access more than 100 U.S. stocks and ETFs tokenized on Ethereum.
Earlier this year, Ondo rolled out its flagship product, Ondo Short-Term U.S. Government Treasury (OUSG), on the XRP Ledger (XRPL). The move was aimed at introducing OUSG to XRPL’s institutional user base.