State Street and Galaxy Plan Tokenized Liquidity Fund Launch on Solana with Ondo Backing

• The fund, known as State Street Galaxy Onchain Liquidity Sweep Fund, integrates traditional finance with blockchain for seamless cash sweeps onto public networks.

• It targets accredited investors, allowing inflows and outflows in PYUSD, with State Street providing custody.

• Launch on Solana in early 2026, expanding to Stellar and Ethereum via Chainlink’s CCIP, supporting growing RWA market projected at over $10 trillion by 2030.

Discover how State Street’s tokenized private liquidity fund on Solana revolutionizes onchain cash for institutions. Ondo Finance seeds with $200M. Explore the future of TradFi and blockchain integration today.

What is the State Street Galaxy Onchain Liquidity Sweep Fund?

The State Street Galaxy Onchain Liquidity Sweep Fund (SWEEP) is a new tokenized private liquidity fund designed to bridge traditional finance and blockchain by sweeping cash balances directly onto public networks. Developed by State Street Investment Management and Galaxy Asset Management in partnership with Ondo Finance, it enables accredited investors to deposit and withdraw using PayPal’s PYUSD stablecoin, providing round-the-clock liquidity. The fund leverages Galaxy’s digital asset infrastructure and State Street’s custody services to ensure security and compliance in the evolving tokenized asset space.

How will the SWEEP fund integrate with major blockchains?

The SWEEP fund will initially launch on Solana in early 2026, chosen for its high throughput and low fees, ideal for tokenized real-world assets (RWAs). Subsequent expansions to Stellar and Ethereum will utilize Chainlink’s Cross-Chain Interoperability Protocol (CCIP) for seamless asset transfers across networks. This multi-chain approach allows the fund to tap into established ecosystems where stablecoins and RWAs already thrive, enhancing accessibility for institutional investors. According to blockchain analytics from Dune Analytics, Solana’s transaction volume for tokenized assets has surged 300% year-over-year, underscoring its appeal for such initiatives.

State Street Investment Management and Galaxy Asset Management are teaming up with Ondo Finance to introduce this innovative tokenized liquidity fund, which directly channels cash sweep balances onto public blockchains. This development unlocks a vital source of continuous, 24/7 onchain liquidity for market participants.

The SWEEP fund is structured to accept and distribute PayPal’s PYUSD stablecoin exclusively for accredited investors. Ondo Finance plans to provide an initial investment of $200 million, linking a prominent tokenized RWA provider to State Street’s robust tokenization framework. Galaxy Digital’s infrastructure will power the operations, while State Street Bank and Trust Company serves as the custodian to maintain regulatory standards.

“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. This collaboration emphasizes the fund’s role in merging established financial practices with blockchain efficiency.

“Tokenization is rapidly becoming the connective tissue between traditional finance and the onchain economy,” noted 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 Treasurys with 24/7 instant mints and redemptions.”

Race to define onchain cash

This initiative positions State Street and its partners amid a competitive landscape where institutions are redefining onchain cash equivalents. Major players like BlackRock and Franklin Templeton have already deployed tokenized money-market and short-term fixed-income funds on public blockchains, offering daily liquidity and yield opportunities. Ondo Finance has similarly focused on packaging US Treasurys and credit instruments into onchain formats that interface with crypto ecosystems, as reported by financial analysts at Bloomberg.

The SWEEP fund differentiates itself by emphasizing immediate blockchain integration for cash management, potentially setting a new standard for institutional adoption. Data from the Tokenized Asset Coalition indicates that tokenized fund assets under management have exceeded $5 billion globally in 2025, with projections for exponential growth driven by regulatory clarity and technological advancements.

Building an onchain capital markets stack

The SWEEP launch signals the maturation of tokenized products into a cohesive onchain capital markets infrastructure, moving beyond experimental phases. For instance, recent developments allow US Securities and Exchange Commission-registered companies to raise capital directly on Ethereum and Solana through stablecoin sales with instant settlement to digital wallets. This equity-focused innovation complements SWEEP’s liquidity layer.

The partnership delineates clear roles: State Street ensures regulatory compliance and custodial oversight, Galaxy provides specialized blockchain infrastructure and tokenization knowledge, and Ondo supplies seed capital alongside its established RWA distribution channels. Such synergies are crucial as the tokenized RWA sector, valued at $2.5 billion according to Boston Consulting Group reports, continues to attract institutional inflows.

Solana’s role in the tokenization race

Selecting Solana as the primary network underscores its prominence in the tokenization arena, where it excels in handling high-volume tokenized assets and trading activities. The blockchain’s sub-second finality and cost efficiency make it attractive for issuers seeking rapid settlement, from public shares to liquidity experiments.

Prominent institutions have embraced Solana for digital asset initiatives, including Western Union for remittance processing exceeding $100 billion annually and Pfizer for merchant payments totaling $2 trillion yearly. Additionally, Solana-based physical staked exchange-traded funds (ETFs) have amassed nearly $1 billion in assets under management, per data from ETF provider reports. By starting on Solana and extending to Stellar and Ethereum, SWEEP can leverage diverse stablecoin and RWA infrastructures, fostering broader interoperability.

Frequently Asked Questions

What is the expected launch timeline for the State Street tokenized private liquidity fund on Solana?

The State Street Galaxy Onchain Liquidity Sweep Fund is slated to debut on Solana in early 2026. This timeline allows for thorough testing and regulatory alignment, with expansions to other chains following shortly after to maximize accessibility for institutional investors.

Which investors can participate in the SWEEP fund and what stablecoin does it use?

Participation is limited to accredited investors, ensuring compliance with securities regulations. The fund operates using PayPal’s PYUSD stablecoin for deposits and redemptions, providing a familiar and stable entry point into onchain liquidity solutions.

Key Takeaways

• Institutional tokenization advances: The SWEEP fund exemplifies how firms like State Street and Galaxy are integrating TradFi with blockchain for efficient cash management.
• Multi-chain strategy: Starting on Solana with plans for Stellar and Ethereum via Chainlink CCIP, it broadens liquidity access across ecosystems.
• Seed investment impact: Ondo’s $200 million commitment strengthens the fund’s launch and signals growing confidence in RWAs for institutional portfolios.

Conclusion

The launch of the State Street tokenized private liquidity fund on Solana, backed by Galaxy Asset Management and Ondo Finance, marks a pivotal step in merging traditional finance with onchain innovation. By offering 24/7 liquidity through PYUSD and a multi-chain framework, it addresses key institutional needs in the rapidly expanding RWA landscape. As tokenization continues to evolve, investors should monitor these developments for opportunities to engage with the next generation of digital capital markets.