State Street Investment Management and Galaxy Asset Management are collaborating with Ondo Finance on a tokenized liquidity fund designed to transfer cash “sweep” balances directly onto public blockchains, potentially creating a source of 24/7 on-chain liquidity.
The upcoming State Street Galaxy Onchain Liquidity Sweep Fund, or SWEEP, will accept and disburse PayPal’s (PYUSD) stablecoin for accredited investors, the companies announced on Tuesday.
Ondo is set to initially fund the project with $200 million, linking a major tokenized real-world asset (RWA) issuer directly to State Street’s tokenization framework. The fund will leverage Galaxy Digital infrastructure, while State Street Bank and Trust Company, an affiliate of State Street Investment Management, will serve as custodian.
SWEEP is scheduled to launch on Solana in early 2026, with subsequent rollouts on additional networks like Stellar and Ethereum, utilizing Chainlink’s Cross-Chain Interoperability Protocol (CCIP).
Related: Solana and Coinbase’s Base connect together using Chainlink
Race to define on-chain cash
This initiative introduces another major player into a growing competition to establish what “on-chain cash” means for institutions. BlackRock and Franklin Templeton have already developed tokenized cash-management products, including money-market and short-term fixed-income funds, on public blockchains. Ondo has focused on transforming Treasurys and other credit exposures into on-chain structures that integrate with crypto markets.
“By collaborating with Galaxy, we aim to lead the change and advance the evolution of the TradFi landscape on-chain,” stated Kim Hochfeld, global head of cash and digital assets for State Street Investment Management.
“Tokenization is becoming increasingly crucial to connecting traditional finance with the on-chain economy,” remarked Ian De Bode, president of Ondo Finance. “Our intended investment will not only support this innovative fund but also bolster Ondo’s growth that offers institutional investors access to short-term US Treasuries with 24/7 instant mints and redemptions.”
Related: Blockchain trial on Canton Network tests collateral reuse with tokenized US Treasurys
Building an on-chain capital markets stack
The launch occurs as tokenized funds and equities increasingly resemble elements of a developing on-chain capital markets stack, rather than isolated experiments.
Superstate recently enabled on-chain capital raising for US Securities and Exchange Commission‑registered public companies through its Direct Issuance Programs on Ethereum and Solana, targeting the equity segment of that stack by allowing issuers to sell new stock directly for stablecoins, settling instantly to investor wallets.
State Street’s collaboration with Galaxy and Ondo also showcases how roles are evolving as traditional finance and crypto entities share similar products. State Street offers regulatory protection and custody, Galaxy adds expertise in digital assets and tokenization, while Ondo supplies capital and an established RWA distribution network.
Related: Galaxy expands into UAE as part of Middle East push
Solana’s role in the tokenization race
Solana’s selection as the initial platform underscores a secondary competitive landscape forming alongside the product arms race. The blockchain has become increasingly favored for tokenized assets and high-throughput trading, from tokenized public equities to trials in on-chain liquidity funds, as issuers seek lower fees and swift settlements.
Some of the world’s largest institutions have opted for the Solana blockchain for their digital asset strategies, including Western Union, processing over $100 billion in remittance transactions yearly, and Pfizer, managing $2 trillion in merchant payment volume annually. Physical staked exchange-traded funds (ETFs) on Solana have approached nearly $1 billion in assets under management.
Launching on Solana first, with aspirations to expand to Stellar and Ethereum, will enable SWEEP to leverage multiple ecosystems where stablecoins and RWA tokens are already integrated within the framework.
