Intro
We have talked about tokenization several times, especially the tokenization of single securities, xStocks and the SEC’s moves.
We return to the topic because the concept of financial tokenization has evolved, and this could even be an epoch-making moment. A few days ago Ondo Finance launched its tokenized portfolios. What are they? They are an entire investment strategy, in practice a portfolio of assets, packed into a single token. They are built on models designed by BlackRock (The Block).
What Ondo’s tokenized portfolios are
The three BlackRock-based “Intelligent Portfolios” are (Ondo):
- BLKHIon (High Income): 9 iShares bond ETFs, for example 18% HYDB and 18% IGEB;
- BLKDIGon (Diversified Growth): about 70% stocks and 30% bonds and alternatives, Bitcoin included;
- BLKGRWon (High Growth): about 95% stocks and 5% Bitcoin.
Rebalancing is roughly quarterly and dividends are reinvested (Ondo docs). In total Ondo offers seven portfolios, four of them built in-house. BlackRock only provided the models: it does not manage, issue, hold or distribute the tokens. Ondo also flags a conflict of interest, because the portfolios contain iShares ETFs (Ondo).
Each portfolio is a standard ERC-20 smart contract (token) on the Ethereum and BNB Chain blockchains. It can sit in MetaMask or a Ledger, be sent to anyone 24 hours a day and be used as collateral in DeFi (Ondo docs). And it is already traded: Gate listed the seven Ondo portfolios against USDT on September 28 (Gate).
Permissioned tokens and freely transferable tokens
Permissioned tokens, such as BlackRock’s BUIDL, Ondo’s OUSG or Franklin Templeton’s BENJI, are real fund shares. However, they only move between approved wallets (allowlist). BUIDL requires qualified investors and at least 5 million dollars (Securitize).
Freely transferable tokens, like Ondo’s or xStocks, track the price, not the fund share. There are two doors:
- primary market: issuance and redemption with Ondo, after identity verification (KYC). It runs on US trading days from 9:30 to 15:45 New York time. At this time of year that means 15:30 to 21:45 Italian time (Ondo docs);
- secondary market: buying from other investors 24/7, but without KYC (Ondo docs).
What buyers really own (and the risks)
These are not ETF investment funds. The token is a structured note, that is a debt security, issued by Ondo Global Markets (BVI) Ltd, a British Virgin Islands company. Its rights are governed by Swiss law (Ondo docs). Underneath there are real securities held at a regulated US broker-dealer. A third-party agent holds a first-priority claim on them on behalf of token holders. There is no vote and no shareholder rights: for Ondo it is “not a fund or an ETF” (Ondo docs).
The main risks:
- multiple counterparties: issuer, broker, custodian, smart contract (plus the custody of your own wallet);
- minimal liquidity: BLKDIGon on Ethereum has about 19 holders (Etherscan);
- a price that can drift from the value of the basket when US markets are closed;
- recourse limited to the collateral only, with arbitration in Zurich;
- costs (annual fee, other fees, spread, 30% withholding tax on US dividends) published only in the app (Ondo docs);
- a dispute over control of Ondo after the death of founder Nathan Allman (May 2026) (The Block).
ESMA has warned that tokenized stocks “typically do not confer shareholder rights” (Reuters).
What about Italy?
MiCA does not apply to financial instruments (art. 2), which remain under MiFID II and the Prospectus Regulation. Italy’s FinTech Decree allows securities in digital form (Consob). However, we found no official position from Consob on these products.
Can an Italian saver buy them? It is not clear. For Ondo Stocks (one stock per token) there is a prospectus approved in Liechtenstein, passported into Italy and open to retail investors (final terms). Ondo’s eligibility page, however, still restricts the European Economic Area to professional investors. For the tokenized portfolios we found no EU documents (final terms or KID). And MetaMask excludes the EEA for Ondo tokens (MetaMask), while Kraken offers xStocks to EU clients (Kraken).
Tokenized portfolios are a powerful idea. Today, however, each one is an offshore debt security, with low liquidity and an uncertain regulatory profile for anyone investing from Italy.
This article is for information purposes only and is not financial advice.
