Ondo Finance invests $25M in YLDS stablecoin to diversify fund

Ondo Finance Invests $25M in YLDS Stablecoin to Diversify Tokenized US Treasury Fund Amid Growing Crypto-Backed Lending Market

  • Ondo Finance invested $25 million in the yield-bearing stablecoin YLDS to diversify its US Treasurys fund reserves.
  • The Ondo Short-Term US Government Bond Fund (OUSG) offers onchain US Treasury exposure with 24/7 redemptions and a 3.68% estimated annual return.
  • Figure Technology Solutions, the issuer of YLDS, has originated over $19 billion in loans and completed its Nasdaq IPO this year.
  • Crypto-backed lending is expanding globally, with new products like Bitcoin-backed home loans and Ether-backed loans offered by various platforms.
  • Ondo Finance recently received regulatory approval to offer tokenized stocks in Europe from the Liechtenstein Financial Market Authority (FMA).

Ondo Finance has acquired $25 million worth of YLDS, a yield-bearing stablecoin issued by Figure Technology Solutions, to enhance the asset diversity backing its tokenized US Treasurys fund. This addition complements OUSG’s current portfolio, which includes tokenized Treasury products from asset managers like BlackRock, Fidelity, Franklin Templeton, and WisdomTree, as stated in the company announcement on Monday.

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The Ondo Short-Term US Government Bond Fund (OUSG) targets institutional investors by providing onchain exposure to US Treasurys. It allows 24/7 redemptions and offers an estimated annual return of 3.68%. The fund holds approximately $777 million in total value locked (TVL) as of now. Details on fund assets are available at RWA.xyz.

Figure Technology Solutions operates lending and capital markets infrastructure on the Provenance blockchain. It has originated more than $19 billion in loans, spanning home-equity lines, mortgage products, and crypto-backed credit. The company recently completed its Nasdaq initial public offering (IPO). According to DefiLlama data, the YLDS stablecoin has a market capitalization near $100 million.

Founded in 2021 and based in the United States, Ondo Finance specializes in tokenizing traditional financial assets. In October, it expanded its offerings to the BNB Chain, including over 100 tokenized Wall Street stocks and exchange-traded funds. On Wednesday, the platform gained regulatory approval from the Liechtenstein Financial Market Authority (FMA) to offer tokenized stocks within Europe.

Figure’s stock price rose nearly 4% during early trading on Monday, as shown in Yahoo Finance data.

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The market for crypto-backed lending is expanding worldwide. Recent developments include Block Earner launching Bitcoin-backed home loans in Australia, providing cash loans up to half a property’s value with crypto collateral secured by Fireblocks. Stablecoin issuer Tether invested in Ledn, a business specializing in Bitcoin-backed consumer loans that originated over $390 million in BTC loans in Q3. Centralized exchanges are also growing their lending options beyond Bitcoin; for example, Coinbase launched Ether-backed loans for U.S. customers, enabling borrowing up to $1 million in USDC against Ether holdings. According to Dune data, Coinbase’s onchain lending markets have originated about $1.28 billion in loans since launching earlier this year.

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