State Street and Galaxy Asset Management are set to introduce a tokenized liquidity fund in early 2026, utilizing stablecoins to facilitate continuous investor flows and enhance the application of public blockchains in institutional cash management, as announced by the companies on Wednesday.
The fund, named the State Street Galaxy Onchain Liquidity Sweep Fund (SWEEP), will allow subscriptions and redemptions in PYUSD, a stablecoin issued by PayPal, provided the fund has sufficient assets to manage the requests. Access to the fund is restricted to Qualified Purchasers who meet specific criteria. Ondo Finance has pledged approximately $200 million to initially support the offering.
The firms plan to roll out SWEEP on Solana initially, with plans to incorporate Stellar (XLM) and Ethereum (ETH) subsequently. Galaxy intends to utilize Chainlink technologies to facilitate data and asset transfers across different blockchains.
The fund is tailored for institutions seeking to maintain cash-like assets onchain while preserving the liquidity expectations typical of standard sweep products.
Kim Hochfeld, global head of cash and digital assets at State Street, remarked that this initiative signifies a transformation in the collaborative landscape between banks and crypto companies.
“By collaborating with Galaxy, we will collectively advance and foster the evolution of the TradFi space onchain,” she stated.
Ondo Finance President Ian De Bode noted that the firm’s anticipated investment underscores the ongoing convergence between traditional finance and the crypto sector.
“Tokenization is swiftly becoming the nexus between traditional finance and the onchain economy, with SWEEP marking a significant progression in that trajectory,” he commented.
This development contributes to the companies’ previous projects together, including a series of digital-asset ETFs launched in 2024.
