BlackRock Ondo Finance Tokenization: How BUIDL Fund & RWA Work
2026-10-05
Real-world asset (RWA) tokenisation is bringing traditional financial products such as US Treasury bills, money-market funds, stocks and ETFs onto blockchain networks. Two companies at the centre of this shift are BlackRock and Ondo Finance.
Their relationship is broader than a simple partnership. BlackRock operates tokenised products such as the BlackRock USD Institutional Digital Liquidity Fund (BUIDL), while Ondo has built products that can provide exposure to institutional Treasury funds and, more recently, tokenised portfolios based on investment strategies developed by BlackRock.
Key Takeaways
- BUIDL is BlackRock’s tokenised fund backed by cash, US Treasury bills and repurchase agreements.
- OUSG is Ondo’s tokenised Treasury product and can hold BUIDL alongside other institutional funds.
- Ondo Intelligent Portfolios use single tokens to provide exposure to diversified baskets, including strategies developed by BlackRock for Ondo.
What Is RWA Tokenization and How Does It Work?
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Real-world asset tokenisation means representing ownership or economic exposure to an off-chain asset through blockchain-based tokens.
The basic idea is relatively straightforward. Instead of keeping records of an investment entirely within traditional financial infrastructure, the ownership or economic interest can also be represented on a blockchain.
For a Treasury-focused product, the structure generally works like this:
- A regulated fund or issuer purchases assets such as US Treasury bills, repurchase agreements, cash or money-market instruments.
- Investors receive digital tokens representing an interest in the fund or a contractual claim linked to the portfolio.
- Blockchain infrastructure records ownership, transfers and settlement.
- The token's value is linked to the net asset value (NAV) of the underlying portfolio.
- KYC, eligibility requirements, transfer restrictions and redemption rules continue to apply.
This last point is important. Tokenization does not automatically turn a traditional security into an unrestricted cryptocurrency.
The blockchain changes the infrastructure used for ownership, settlement and transfer, but the underlying securities, legal agreements and regulatory framework remain relevant.
BlackRock describes tokenised Treasury funds as funds where ownership is represented by digital tokens on a blockchain, allowing investors to access US dollar yield through blockchain infrastructure.
In other words, RWA tokenisation is less about replacing traditional finance and more about connecting traditional assets with digital financial infrastructure.
How BlackRock BUIDL Works
The BlackRock USD Institutional Digital Liquidity Fund, commonly known as BUIDL, is one of the best-known examples of tokenised Treasury exposure.
Launched in 2024, BUIDL was BlackRock's first tokenised fund issued on a public blockchain. The fund invests in cash, US Treasury bills and repurchase agreements, while its shares are represented through blockchain tokens.
BUIDL Is Not a Cryptocurrency
BUIDL is important to distinguish from a typical crypto asset or stablecoin.
Its value is connected to the fund's underlying portfolio rather than being driven purely by crypto-market speculation. Investors are purchasing an interest in a fund, not directly buying individual Treasury bills.
The structure can offer several potential advantages, including:
- Blockchain-based ownership records
- Faster settlement
- Digital transfer capabilities
- Compatibility with onchain financial infrastructure
- Potential use as collateral within digital-asset markets
BUIDL has subsequently been integrated into several institutional crypto workflows, including collateral arrangements. In 2026, for example, a framework involving BlackRock, OKX and Standard Chartered enabled eligible institutional clients to use BUIDL as yield-bearing collateral while maintaining regulated custody arrangements.
However, BUIDL remains an investment product with eligibility, transfer and regulatory restrictions. Its yield is not guaranteed, and investors remain exposed to fund, liquidity, custody, blockchain and other risks.
How Ondo OUSG Relates to BUIDL
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Ondo Finance takes a slightly different approach.
Its OUSG product is designed to provide tokenised exposure to short-term US Treasury investments. Rather than simply representing one traditional Treasury security, OUSG can allocate across multiple institutional Treasury and money-market funds.
That can include BlackRock's BUIDL, alongside other funds and liquidity assets.
Based on the portfolio snapshot provided by Ondo dated 2 October 2026, the approximate allocation was:
The composition can change over time, so it would be inaccurate to describe OUSG as simply a BUIDL wrapper. Instead, it is better understood as a diversified tokenised Treasury strategy that can include a substantial allocation to BUIDL.
For example, if an eligible investor deposits $100,000 USDC and the OUSG NAV is $100 per token, the investor would receive approximately 1,000 OUSG tokens. The number of tokens and their value are determined by the product's NAV and applicable rules.
OUSG Minimum Investment
Ondo currently publishes different minimums depending on the type of transaction:
OUSG is not an unrestricted retail investment product. Investors must meet Ondo's eligibility requirements, complete onboarding and KYC, and comply with applicable jurisdictional restrictions.
This distinction matters because tokenisation does not remove the regulatory requirements associated with securities.
BlackRock and Ondo: More Than BUIDL
The BlackRock-Ondo relationship has also expanded beyond Treasury products.
Ondo launched Ondo Intelligent Portfolios, with the first three portfolios based on investment strategies developed by BlackRock for Ondo:
- BLKHIon — Ondo High Income Powered by BlackRock
- BLKDIGon — Ondo Diversified Growth Powered by BlackRock
- BLKGRWon — Ondo High Growth Powered by BlackRock
Ondo describes these products as single onchain tokens providing exposure to a basket of tokenised assets. The first three strategies were developed by BlackRock for Ondo, while the portfolios themselves are managed, sponsored and administered by Ondo.
What Is BLKDIGon?
BLKDIGon, or Ondo Diversified Growth Powered by BlackRock, is particularly relevant to the growing RWA narrative.
The portfolio seeks balanced, moderate-risk growth through a model allocation of approximately 70% equities and 30% fixed income and alternatives. Its underlying exposure includes tokenised assets covering areas such as US equities, international equities, bonds and alternatives.
Importantly, BLKDIGon is not BUIDL and it is not a conventional BlackRock mutual fund or ETF.
It is an Ondo portfolio token based on a strategy developed by BlackRock for Ondo.
BlackRock's role is therefore narrower than simply managing every Ondo product. Ondo's disclosures state that BlackRock provides nondiscretionary model portfolio strategies, while Ondo handles the portfolio tokens and their implementation.
This distinction helps explain why the terms BlackRock Ondo Finance, BUIDL, OUSG and BLKDIGon should not be treated as interchangeable.
What Is Ondo Stocks Tokenization?
Ondo's broader tokenisation strategy also extends to stocks and ETFs.
The basic concept is to bring economic exposure to traditional securities onto blockchain rails. Investors can hold tokenised representations through Ondo's infrastructure rather than using only conventional brokerage systems.
However, tokenised stock exposure should not automatically be interpreted as direct ownership of shares in the same way as holding securities through a traditional brokerage account.
Depending on the product structure, investors may not receive:
- Traditional shareholder voting rights
- Direct ownership of the underlying security
- Unlimited transfer rights
- Access in every country
- Guaranteed 24/7 primary-market redemption
- Protection from losses in the underlying asset
Ondo's Intelligent Portfolio documentation specifically states that portfolio tokens provide economic exposure rather than direct ownership of the underlying stocks and ETFs.
This highlights one of the most important concepts in RWA investing: economic exposure and legal ownership are not necessarily the same thing.
How to Invest in BUIDL, OUSG and Ondo Products
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The investment process depends on the specific product.
BUIDL: Investors generally need to qualify through approved distribution and fund infrastructure and complete the required onboarding and documentation.
OUSG: Eligible investors must complete Ondo's onboarding and KYC process and meet the product's qualification requirements.
Ondo Stocks and Intelligent Portfolios: Availability depends on jurisdiction, eligibility and the specific product. Ondo currently states that Intelligent Portfolios are generally aimed at eligible non-US investors, subject to restrictions.
It is also important not to confuse the ONDO token with these investment products. Buying the ONDO token does not mean buying BUIDL, OUSG, BLKDIGon or an underlying Treasury security.
Before investing, users should check the issuer, legal structure, redemption process, fees, minimum investment, permitted jurisdictions and applicable investor requirements.
Risks of RWA Tokenisation
Tokenised Treasury products may have relatively conservative underlying assets, but they are not risk-free.
Potential risks include:
- Underlying asset and interest-rate risk
- Issuer and fund risk
- Custodian and administrator risk
- Smart-contract and blockchain risk
- Stablecoin depeg risk
- Liquidity and redemption restrictions
- Regulatory changes
- Jurisdictional limitations
- Token transfer restrictions
- Differences between token ownership and direct securities ownership
BUIDL's own disclosures also make clear that tokenised fund investments involve risks that can differ from traditional investments, and that the fund is not guaranteed to maintain a fixed $1 value at all times.
Conclusion
BlackRock and Ondo Finance demonstrate how RWA tokenisation is gradually connecting traditional finance with blockchain infrastructure.
BUIDL brings short-term Treasury exposure onchain, while OUSG can combine BUIDL with other institutional Treasury and money-market products.
Meanwhile, Ondo Intelligent Portfolios take tokenisation further by packaging diversified investment strategies into single blockchain-based tokens.
The key is understanding exactly what each token represents, who issues it and what rights the investor receives. For crypto users looking to explore the wider digital-asset market, Bitrue provides a convenient platform for discovering and trading crypto assets.
Always research the product and risks carefully, then use a trusted platform such as Bitrue for an easier and safer crypto trading experience.
FAQ
What is BlackRock BUIDL?
BUIDL is BlackRock's tokenised USD Institutional Digital Liquidity Fund. It invests in cash, US Treasury bills and repurchase agreements, with fund interests represented through blockchain tokens.
Is OUSG the same as BUIDL?
No. OUSG is an Ondo Finance tokenised Treasury product that can invest in several institutional Treasury and money-market funds, including BUIDL. Therefore, OUSG should not be considered the same product as BUIDL.
What is BLKDIGon?
BLKDIGon is Ondo Diversified Growth Powered by BlackRock. It is a single portfolio token providing exposure to a diversified basket of tokenised assets based on a portfolio strategy developed by BlackRock for Ondo.
Is RWA tokenisation the same as owning the underlying asset?
Not necessarily. A token can provide economic exposure to an underlying asset without giving the holder every legal right associated with direct ownership. Investors should always check the specific product's legal structure.
Can anyone buy BUIDL or Ondo tokenised products?
No. Availability depends on the product, investor eligibility, KYC requirements and jurisdiction. Some products are specifically restricted to qualified or eligible investors, while Ondo Intelligent Portfolios are generally subject to non-US and other jurisdictional restrictions.
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Disclaimer: The content of this article does not constitute financial or investment advice.
