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John Hoffman, Managing Director and Head of Product Portfolios at Ondo Finance, argued in The Block on August 20 that the tokenized real-world asset (RWA) sector is tracing the same growth path that exchange-traded funds followed in their early years. The comparison carries institutional weight: Hoffman spent nearly two decades at Invesco leading its Americas ETF and index strategies division, then served as Managing Director at Grayscale, before joining Ondo Finance in June 2026.

The ETF market launched in the U.S. in 1993 with the SPDR S&P 500 fund and took roughly three decades to reach $20 trillion in global assets. Proponents of tokenization argue the same structural shift is underway, using blockchain infrastructure to lower investment minimums, enable around-the-clock settlement, and make previously illiquid assets like private credit, real estate, and government bonds accessible to a broader investor base.

Speaking at the time of his hire, Hoffman framed the trajectory in terms his former industry would recognize: "ETFs redefined how investors allocate capital and democratized access globally. It took 30 years for ETFs to become the default vehicle. Onchain finance will compress that timeline dramatically."

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The numbers behind the thesis

Ondo's own platform gives a concrete sense of current scale. The firm holds $3.43 billion in total assets under management across three products, according to Allium Research data captured in May 2026.

Its flagship product, USDY, a yield-bearing dollar instrument currently offering 4.65% annually, accounts for $2.10 billion of that figure and added $1.4 billion in net inflows in the first half of 2026 alone. OUSG, a tokenized U.S. Treasury product aimed at institutional clients, holds $285 million. Ondo Global Markets, the firm's tokenized equities platform, crossed $1 billion in total value locked across more than 260 stock and ETF symbols within eight months of launch, giving Ondo an estimated 60 to 70 percent share of the tokenized equities market, according to third-party analyst estimates.

To place those figures in competitive context: BlackRock's BUIDL fund holds approximately $2.4 billion and commands roughly 40 percent of the tokenized treasury market, but requires a $5 million investment minimum. Franklin Templeton's FOBXX holds $829 million deployed across eight blockchains. USDY's accessible entry threshold of $100 to $500 positions it as a structurally different product, targeting retail and emerging-market investors that neither institutional offering can realistically reach.

The broader onchain RWA sector, excluding stablecoins, has grown from roughly $5 billion in 2022 to more than $36 billion by mid-2026.

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The regulatory wall

The ETF analogy is instructive but imperfect. ETFs scaled within an established legal framework. Tokenized securities, particularly those aimed at U.S. retail investors, still lack one. Ondo has made clear that its most ambitious domestic expansion depends on passage of the Digital Asset Market Clarity Act, known as the CLARITY Act. The bill passed the House in July 2025 and cleared the Senate Banking Committee by a 15-to-9 vote in May 2026, a vote Ondo publicly called "a landmark moment for tokenization." It now awaits a full Senate floor vote. Bernstein estimates the probability of passage this year at around 30 percent, citing procedural uncertainty.

The legislation, if enacted, would define digital assets in U.S. statute for the first time and establish clear SEC and CFTC jurisdiction over their respective digital asset classes, including tokenized securities. It would also require tokenized assets to carry legally identical rights to their traditional equivalents.

Also working in Ondo's favor: the SEC formally closed a multi-year confidential investigation into the company earlier in 2026 without filing charges, removing a significant source of legal uncertainty.

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What this means outside the United States

For investors in South Asia and sub-Saharan Africa, the relevant story is not contingent on U.S. legislation. USDY is already accessible through crypto exchanges operating in India, including CoinDCX and Mudrex, via USDC, at entry thresholds starting around $100 to $500. For the developer community specifically, USDY is also deployed on Aptos and Sui, two networks with a substantial presence among Indian Web3 builders.

The instrument's 4.65% annual yield in U.S. dollars compares favorably to Indian fixed deposits at 6.5 to 7 percent in rupees, once accounting for the rupee's historical annual depreciation of 3 to 4 percent against the dollar.

Indian investors should note, however, that domestic tax treatment is punitive: yield income is taxed at income tax rates of up to 30 percent plus a 4 percent cess surcharge, and capital gains face an additional 30 percent flat tax. There is also a regulatory dimension to consider. The Indian government has not issued explicit guidance on participation in overseas DeFi protocols, which means USDY access currently sits in a legal grey area for Indian investors. Anyone considering participation should seek independent legal advice before proceeding.

In Nigeria, where crypto inflows exceeded $92 billion in 2025 and stablecoins represent roughly 43 percent of sub-Saharan Africa's total crypto transaction volume, yield-bearing dollar instruments address a direct need. Naira volatility has already pushed stablecoin payroll into the mainstream. The model is also gaining local institutional traction: Paga, a prominent Nigerian fintech, has partnered with the Sui blockchain to launch yield-bearing USD stablecoin accounts, a development that signals growing appetite for dollar-denominated yield products within established regional distribution networks. USDY, as a yield-bearing instrument rather than a classified security, faces a cleaner regulatory path to wider distribution than Ondo's institutional products. OUSG, by contrast, carries KYC requirements and accredited investor restrictions that would limit access regardless of what U.S. legislators decide.

Kenya presents a further dimension worth watching. M-Pesa's entrenched mobile payment infrastructure offers a credible on-ramp for tokenized products at meaningful scale. Separately, emerging private credit protocols are already funding African fintech lenders at yields of 10 to 17 percent, a range directly relevant to Ondo's expanding private credit partnerships and to Kenyan investors seeking alternatives to traditional fixed income.

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What comes next

Ondo has also pivoted its infrastructure strategy. In July 2026, the company dropped plans for a dedicated Layer 1 blockchain in favor of Ondo Network, a private high-speed trading platform. Its first product on that network, Ondo Perps, allows perpetual futures trading using tokenized assets as collateral.

A partnership with Franklin Templeton to offer tokenized versions of five of the asset manager's ETFs adds further institutional backing to the product roadmap. The relationship is worth examining closely: Franklin Templeton is simultaneously an Ondo partner on tokenized ETF distribution and, through its FOBXX product at $829 million AUM, a direct competitor in the tokenized treasury space. The two roles are not mutually exclusive, but investors should understand they are dealing with a partnership that also contains a competitive dynamic.

The CLARITY Act vote, whenever it comes, will determine how quickly Ondo and competitors can bring these products to U.S. retail investors. For investors outside the United States, many of the access routes are already open in practice, though the barriers vary considerably by market: regulatory grey areas in India, indirect distribution pathways in West Africa, and infrastructure buildout still underway in East Africa mean that the opportunity is real without being uniformly simple to reach.