SKN | Ondo Expands Tokenized Treasury Reserves With $25M Purchase of Figure’s YLDS Stablecoin

Move Broadens Backing for $777M Tokenized Treasury Fund as Crypto-Backed Lending Surges

Ondo Finance has added $25 million of Figure Technology Solutions’ yield-bearing stablecoin YLDS to the reserves backing its flagship tokenized U.S. Treasurys fund, marking a new phase of diversification as institutional demand for onchain fixed-income products continues to build.

The investment adds another component to the collateral base supporting the Ondo Short-Term US Government Bond Fund (OUSG), a tokenized vehicle designed to provide 24/7 redemption access and onchain exposure to short-duration Treasurys. OUSG currently holds products issued by BlackRock, Fidelity, Franklin Templeton and WisdomTree and has grown to roughly $777 million in total value locked.

Ondo said the addition of YLDS reflects its broader objective of building a resilient, multi-issuer ecosystem of onchain cash equivalents. YLDS itself has emerged as one of the more prominent yield-bearing stablecoins, with a market capitalization near $100 million, according to DefiLlama.

Figure’s Onchain Lending Infrastructure Attracts Institutional Interest

Figure, which built its lending and capital markets stack on the Provenance blockchain, has originated more than $19 billion in loans across home-equity lines, mortgage products and crypto-backed credit. The company completed its Nasdaq IPO earlier this year, reflecting growing public-market interest in blockchain-based financial infrastructure.

Its YLDS token is positioned as a regulated alternative to dollar-backed stablecoins, offering yield derived from short-term U.S. debt. Figure’s stock rose nearly 4% in early Monday trading following Ondo’s announcement.

The tie-up comes as both fintechs and traditional financial institutions increasingly look to onchain instruments to streamline settlement, lower funding costs and integrate crypto-native liquidity into established products.

Ondo Advances Global Tokenization Strategy

Founded in 2021, Ondo Finance has emerged as a key bridge between traditional finance and onchain markets. The company has rapidly expanded its regulated tokenization footprint, launching more than 100 tokenized stocks and ETFs on BNB Chain in October. Last week, it secured approval from the Liechtenstein Financial Market Authority to offer tokenized equities across Europe.

The firm’s growth mirrors a broader shift among global asset managers, who are increasingly exploring tokenized government debt, money-market funds and corporate credit as operational efficiencies and regulatory clarity improve.

Crypto-Backed Lending Rebounds as Institutions Re-Enter the Market

Ondo’s allocation to YLDS lands at a time when crypto-collateralized lending is rapidly gaining traction. A resurgence in institutional appetite has led platforms worldwide to roll out new loan products tied to digital assets.

In Australia, Block Earner introduced Bitcoin-backed home loans allowing borrowers to finance up to half of a property’s value, with custody handled by Fireblocks. Tether announced a fresh investment in Ledn, which originated more than $390 million in BTC-backed loans in the third quarter.

Centralized exchanges are expanding aggressively as well. Coinbase recently launched Ether-backed lending for U.S. users, allowing customers to borrow up to $1 million in USDC against their ETH holdings. Coinbase’s onchain lending markets have already processed roughly $1.28 billion in originations this year, according to Dune Analytics.

A Growing Convergence Between Tokenized Assets and Crypto Collateral

For Ondo and Figure, the reserve partnership underscores a broader convergence underway across digital finance: tokenized traditional assets are increasingly coexisting with crypto-backed credit markets, creating a hybrid liquidity system that is beginning to attract mainstream capital.

With institutional adoption accelerating, Treasury-backed stablecoins and tokenized debt instruments appear poised to play a larger role in the next phase of onchain financial integration.