State Street, Galaxy, and Ondo Join the Tokenized Cash Race with a 24/7 Sweep Fund

State Street Investment Management, alongside Galaxy Asset Management and Ondo Finance, is launching a tokenized liquidity fund named the State Street Galaxy Onchain Liquidity Sweep Fund (SWEEP). This initiative aims to introduce a continuous source of liquidity by integrating PayPal’s stablecoin directly onto public blockchains. The fund expects to launch on Solana in early 2026, later expanding to other networks.

Key Takeaways

State Street, Galaxy, and Ondo are collaborating on a tokenized liquidity fund called SWEEP.
This fund will utilize PayPal’s stablecoin and aims to provide 24/7 on-chain liquidity.
Ondo is investing $200 million to kickstart the fund.
SWEEP is set to launch on Solana but will expand to Stellar and Ethereum.
The initiative reflects a larger trend of institutional interest in blockchain-based cash solutions.

State Street, Galaxy and Ondo join tokenized cash race with 24/7 sweep fund

The Race to Define Onchain Cash

This collaboration adds a significant player to the growing competition to establish definitions around “onchain cash” for institutional use. Notable companies like BlackRock and Franklin Templeton already manage tokenized cash-management vehicles, which include money-market and short-term fixed-income funds deployed on public blockchains. Ondo has been actively involved in wrapping Treasury and credit exposures to create on-chain opportunities in the crypto markets.

Kim Hochfeld, the global head of cash and digital assets at State Street Investment Management, stated, “By partnering with Galaxy, we will push the envelope together and drive the evolution of the TradFi landscape onchain.” Ian De Bode, president of Ondo Finance, emphasized that “Tokenization is rapidly becoming the connective tissue between traditional finance and the onchain economy,” indicating that this fund will anchor new investment opportunities while complementing Ondo’s existing offerings tied to short-term US Treasuries.

Source: Ondo Finance

Constructing an Onchain Capital Markets Stack

The introduction of SWEEP marks a shift where tokenized funds and equities are beginning to form parts of an emerging onchain capital markets framework rather than merely being experimental initiatives. Recently, Superstate launched onchain capital raising for public companies registered with the US Securities and Exchange Commission through its Direct Issuance Programs on both Ethereum and Solana, enabling issuers to sell new shares immediately for stablecoins.

The partnership between State Street, Galaxy, and Ondo signifies how traditional finance and crypto firms are coalescing around common products. State Street offers regulatory compliance and custodial services, while Galaxy brings digital asset infrastructure and tokenization skills, and Ondo contributes capital and an established real-world asset distribution network.

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Solana’s Role in the Tokenization Race

The choice of Solana as the initial launch platform highlights a competitive landscape evolving alongside the product race. The blockchain is becoming a preferred option for tokenized assets and high-speed trading, appealing to issuers seeking lower fees and rapid settlements.

Investments, Solana, Tokenization, Institutions

Prominent institutions, such as Western Union—handling over $100 billion in remittances annually—and Pfizer, with a merchant payment volume of $2 trillion, have adopted Solana for their digital asset strategies. Additionally, the physical staked exchange-traded funds (ETFs) on Solana have reached nearly $1 billion in assets under management. By launching on Solana first and planning to extend services to Stellar and Ethereum, SWEEP will leverage multiple ecosystems where stablecoins and real-world asset tokens are already integrated.