Ondo's value surged by 8% following Ondo Finance's successful trial of instant conversion from BlackRock's tokenized fund to USDC.

Ondo Finance's governance token (ONDO) saw a significant surge in value on Thursday following the successful testing of a new feature that allows near-instant conversions between Circle's USDC stablecoin and BlackRock's BUIDL token.

An Ondo wallet on Ethereum recently redeemed $250,000 worth of BUIDL tokens for USDC, according to data from Etherscan. This transaction was part of a trial for the USDC-to-BUIDL feature, which was announced by Circle on the same day. Ondo Finance CEO Nathan Allman confirmed the trial in a Telegram message to CoinDesk, stating, "We are using it to power instant 24/7/365 redemptions of OUSG into USDC." OUSG refers to the Ondo Short-Term U.S. Government Treasuries token, which is backed by securities sold by the U.S. government.

The news of the transaction quickly spread through social media crypto circles, leading to an initial 8% spike in the value of ONDO before it retraced some of its gains.

BlackRock, a prominent financial institution, made waves last month by entering the asset tokenization sector, a rapidly growing area in the crypto industry. This sector aims to tokenize traditional financial instruments like bonds, credit, or commodities on blockchain platforms.

The BlackRock USD Institutional Digital Liquidity Fund, developed in collaboration with tokenization firm Securitize, holds cash, U.S. Treasury bills, and repurchase agreements. The fund issues the Ethereum-based BUIDL token, which offers daily yield payouts to token holders via blockchain technology. Ondo Finance was an early supporter of the fund, utilizing it as a backing asset for its OUSG token.