State Street Investment Management and Galaxy Asset Management are joining forces with Ondo Finance on a tokenized liquidity fund designed to push cash “sweep” balances directly onto public blockchains, thereby opening up a new source of potential 24/7 onchain liquidity.
The planned State Street Galaxy Onchain Liquidity Sweep Fund, or SWEEP, is structured to accept and disburse PayPal’s (PYUSD) stablecoin for accredited investors, as announced by the companies on Tuesday.
Ondo is anticipated to provide an initial seed investment of $200 million for the fund. This investment will directly integrate a significant tokenized real-world asset (RWA) issuer into State Street’s tokenization infrastructure. The fund will operate using Galaxy Digital’s infrastructure, with State Street Bank and Trust Company, an affiliate of State Street Investment Management, serving as the custodian.
SWEEP is scheduled to launch on the Solana blockchain in early 2026. Subsequent rollouts are planned for other networks, including Stellar and Ethereum, utilizing Chainlink’s Cross-Chain Interoperability Protocol (CCIP).
The Race to Define Onchain Cash
This initiative marks the entry of another major player into the increasingly competitive landscape focused on defining what constitutes “onchain cash” for institutional investors. Leading firms like BlackRock and Franklin Templeton have already introduced tokenized cash-management vehicles, including money-market and other short-term fixed-income funds, on public blockchains. Ondo has established its business model by wrapping U.S. Treasuries and other credit exposures into onchain vehicles designed to integrate with crypto markets.
“By partnering with Galaxy, we will push the envelope together and drive the evolution of the TradFi landscape onchain,” stated Kim Hochfeld, global head of cash and digital assets for State Street Investment Management.
“Tokenization is rapidly becoming the connective tissue between traditional finance and the onchain economy,” said Ian De Bode, president of Ondo Finance. “Our planned investment would not only anchor this innovative fund but also supports the continued growth of Ondo’s fund that offers institutional investors exposure to short-term US Treasuries with 24/7 instant mints and redemptions.”
Building an Onchain Capital Markets Stack
The introduction of SWEEP occurs at a time when tokenized funds and tokenized equities are beginning to form the building blocks of an emerging onchain capital markets infrastructure, moving beyond isolated pilot programs.
Superstate recently enabled onchain capital raising for U.S. Securities and Exchange Commission-registered public companies through its Direct Issuance Programs on Ethereum and Solana. This move targets the equity segment of the market, allowing issuers to sell new stock directly for stablecoins, with immediate settlement to investor wallets.
The collaboration between State Street, Galaxy, and Ondo also illustrates the evolving roles as traditional finance and cryptocurrency firms begin to offer similar products. State Street contributes regulatory expertise and custody services, Galaxy provides digital-asset infrastructure and tokenization proficiency, and Ondo offers both capital and an established network for distributing RWAs.
Solana’s Role in the Tokenization Race
Solana’s selection as the initial launch venue highlights a secondary competitive dynamic emerging alongside the product development race. The blockchain has become a preferred platform for tokenized assets and high-throughput trading, encompassing everything from tokenized public shares to experimental onchain liquidity funds, as issuers seek lower fees and rapid settlement capabilities.
Several of the world’s largest institutions have chosen the Solana blockchain for their digital asset strategies. These include Western Union, which manages over $100 billion in annual remittance volume, and Pfizer, which processes $2 trillion in annual merchant payment volume. Additionally, physical staked exchange-traded funds (ETFs) on Solana have nearly reached $1 billion in assets under management.
By launching initially on Solana, with plans to expand to Stellar and Ethereum, SWEEP will gain access to multiple ecosystems where stablecoins and RWA tokens are already integrated into the existing infrastructure.