Ondo, Morgan, Mastercard & Ripple test tokenised Treasury

Ondo Finance, Kinexys by J.P. Morgan, Mastercard and Ripple have completed a cross-border, cross-bank redemption of tokenised US Treasuries, which they described as the first transaction of its kind between global financial institutions.

Ripple redeemed part of its Ondo Short-Term US Government Treasuries holdings on the XRP Ledger, while the cash settlement was processed through bank infrastructure. The transaction combined a public blockchain asset transfer with a fiat payment routed through Mastercard's Multi-Token Network and settled through Kinexys by J.P. Morgan.

The test was presented as a model for handling redemptions of tokenised assets outside standard banking cut-off windows. In the pilot, Ondo processed the redemption and sent a fiat payout instruction through Mastercard's network, which then passed it to Kinexys.

Kinexys debited Ondo's Blockchain Deposit Account and settled the US dollar proceeds into Ripple's bank account in Singapore via J.P. Morgan's correspondent banking network. The asset leg on the XRP Ledger took less than five seconds, according to the participants.

The pilot addresses a long-standing issue in tokenised real-world assets: issuance and trading may happen on blockchain systems, but redemption still relies on wire transfers, manual steps and limited operating hours. By linking the on-chain and banking sides of the transaction, the participants aimed to show that redemption and payment settlement can be coordinated in a single flow.

How it worked

One side of the transaction took place on a public blockchain, and the other on bank-led payment rails. Mastercard's Multi-Token Network linked the blockchain-based redemption instruction with Kinexys, which then triggered the movement of fiat funds across borders.

The structure matters because tokenised funds and other digital representations of traditional assets are drawing growing interest from banks, asset managers and fintech groups. But the infrastructure needed to move cash between institutions in different countries has often remained tied to conventional systems that do not run continuously.

That gap has weakened one of tokenisation's central promises: that assets can be transferred and settled more quickly, with fewer operational breaks, than in traditional markets. This pilot was designed to demonstrate a path towards near-real-time settlement around the clock, using existing bank accounts rather than a separate payments system.

Ondo said the framework is intended to support redemptions from any public blockchain on which its OUSG fund is issued, including the XRP Ledger. This points to a broader ambition to make tokenised funds interoperable across a range of digital networks while still connecting to established banking channels.

Ian De Bode, President of Ondo Finance, described the transaction as a marker for the tokenised Treasury market. "This milestone represents the first time tokenised U.S. Treasuries have settled across borders and banks in near real time and outside traditional banking windows," he said.

"By connecting public blockchain infrastructure with interbank settlement rails, Ondo, Kinexys by J.P. Morgan, Mastercard and Ripple are laying the groundwork for 24/7 global markets that never close."

For Ripple, the pilot also tested the XRP Ledger's role in institutional asset transactions. Markus Infanger outlined the company's view of how public blockchain networks and bank systems could work together.

"This marks a meaningful step forward in demonstrating that tokenised assets can move seamlessly between public blockchain infrastructure and the global financial system," said Markus Infanger, SVP of RippleX.

"The XRP Ledger enables real-time asset movement, and when paired with global banking infrastructure, this pilot shows how institutions can execute cross-border transactions as a single, integrated flow."

Executives at J.P. Morgan and Mastercard framed the work as part of a broader effort to build common standards across financial institutions, payment networks and blockchain platforms. Both have been developing infrastructure intended to connect tokenised assets with existing banking processes.

"This pilot is an important step towards establishing a framework for institutional-scale tokenised asset markets. To see widespread adoption of tokenised financial products, we need wholesale cross-industry collaboration across geographies, global banking infrastructure and public blockchains. We're excited to continue working with Ondo, Ripple and Mastercard to bring this to life," said Zack Chestnut, Global Head of Commercialisation at Kinexys by J.P. Morgan.

"As tokenised assets continue to see strong institutional momentum and engagement, the focus is quickly shifting to how tokenised commerce can operate at scale in real time," said Raj Dhamodharan, Executive Vice President, blockchain and digital assets at Mastercard.

"With the Mastercard Multi-Token Network, we're enabling near real-time, cross-border settlement using existing bank accounts, bringing coordination, trust and interoperability to institutional on-chain flows."