State Street Investment Management and Galaxy Asset Management are collaborating with Ondo Finance to prepare a tokenized liquidity fund that will directly push cash "sweep" balances onto the public blockchain, becoming a potential source of 24/7 on-chain liquidity.
The two companies announced on Tuesday that the planned State Street Galaxy Onchain Liquidity Sweep Fund (referred to as SWEEP) aims to receive and pay out PayPal stablecoins for qualified investors.
Ondo is expected to provide $200 million as the initial capital for the fund, directly connecting a major tokenized real-world asset (RWA) issuer to State Street's tokenization technology stack. The fund will be supported by the infrastructure of Galaxy Digital, while State Street Investment Management's affiliate, State Street Bank and Trust Company, will act as the custodian.
SWEEP is planned to launch on Solana in early 2026, followed by rollouts on other networks including Stellar and Ethereum, utilizing Chainlink's Cross-Chain Interoperability Protocol (CCIP).
This move adds another heavyweight player to the institutional-level definition of "on-chain cash." BlackRock and Franklin Templeton have already been operating tokenized cash management tools on public chains, including money market and other short-term fixed income funds. As for Ondo, its business is built around packaging U.S. Treasury bonds and other credit exposures as on-chain vehicles accessible to the crypto market.
Kim Hochfeld, Global Head of Cash and Digital Assets at State Street Investment Management, stated, "By partnering with Galaxy, we will jointly push boundaries and drive the evolution of traditional finance on-chain."
Ian De Bode, President of Ondo Finance, remarked, "Tokenization is rapidly becoming the connective tissue between traditional finance and the on-chain economy. Our planned investment will not only provide anchor support for this innovative fund but will also support the continued growth of Ondo's existing fund, which offers institutional investors exposure to U.S. short-term Treasuries with 24/7 instant subscription and redemption."
At the time of this announcement, tokenized funds and tokenized stocks are gradually transitioning from isolated pilots to components of the emerging on-chain capital market stack.
On Wednesday, Superstate launched on-chain fundraising for publicly traded companies registered with the U.S. Securities and Exchange Commission through its Direct Issuance Programs on Ethereum and Solana, targeting the equity side of that stack, allowing issuers to sell new shares directly for stablecoins and settle instantly to investors' wallets.
The collaboration between State Street, Galaxy, and Ondo also highlights the shaping of their respective roles when traditional finance and crypto companies share similar products: State Street provides four levels of regulatory endorsement and custody, Galaxy offers digital asset infrastructure and tokenization expertise, while Ondo provides both funding and an existing RWA distribution network.
Choosing Solana as the launchpad underscores a second competitive track unfolding beneath the product arms race. As issuers seek lower fees and faster settlements, the chain has become a favored place for tokenized assets and high-throughput trading, from tokenized public shares to experiments with on-chain liquidity funds.
Some of the world's largest institutions have chosen the Solana blockchain for their digital asset operations, including Western Union, which handles over $100 billion in remittances annually, and Pfizer, which processes $2 trillion in merchant payments each year. The assets managed by physically collateralized exchange-traded funds (ETFs) on Solana are nearing $1 billion.
Launching first on Solana and planning to expand to Stellar and Ethereum will allow SWEEP to access multiple ecosystems where stablecoins and RWA tokens are already part of the infrastructure.
Related: Vitalik Buterin states that Ethereum (ETH) can address the issue of temporary finality loss.
Original article: “State Street, Galaxy, and Ondo Join the Tokenized Cash Race, Launching a 24/7 Liquidity Fund”
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