Galaxy and State Street Launch Solana-Based SWEEP Tokenized Cash Fund
On Tuesday, U.S. stocks opened positively, with significant gains in major indexes, particularly those related to AI-driven storage. This upswing occurred despite PayPal experiencing a 10% decline in its shares due to disappointing profit forecasts.
Summary
- Galaxy Digital, in partnership with State Street Investment Management, has launched the State Street Galaxy Onchain Liquidity Sweep Fund (SWEEP). This innovative tokenized cash management product is designed to offer consistent on-chain liquidity.
- Institutional investors are able to subscribe and redeem using stablecoins, while also earning yield from traditional securities that include Solana initially, with plans to expand to Ethereum and Stellar.
- Galaxy provides the necessary tokenization framework, Anchorage Digital handles the custody of digital assets, and State Street manages the off-chain portfolio, paralleling institutional trends set by BlackRock’s BUIDL tokenized Treasury fund.
According to CoinDesk, State Street and Galaxy created SWEEP as a “tokenized private liquidity fund,” aiming to transition conventional cash and liquidity management solutions to public blockchains.
SWEEP utilizes Solana for cash management
State Street Investment Management is tasked with managing a portfolio of short-duration, investment-grade securities, functioning similarly to a money market or liquidity fund, while Galaxy’s digital framework handles the issuance and management of tokenized fund shares on Solana.
Subscriptions and redemptions will make use of PayPal USD (PYUSD) stablecoins, empowering qualified investors to effortlessly move funds in and out of the fund at any time, provided the portfolio permits it, thus eliminating the constraints of traditional banking and market hours.
The fund is set to debut with an initial investment of around $200 million from Ondo Finance, which intends to use SWEEP to bolster its reserves and explore further on-chain liquidity options.
State Street Bank and Trust Company will serve as the custodian for the traditional securities in the fund, while Anchorage Digital offers institutional-grade custody for the digital tokens, facilitating a seamless connection between off-chain assets and their on-chain equivalents.
A segment of a broader tokenized cash and Treasury surge
SWEEP is being initially launched on Solana due to its high throughput and low transaction costs, with future expansions anticipated on Ethereum and Stellar to align with client activities in current on-chain systems.
LinkedIn posts from Galaxy and State Street promote the fund as a strategy to “unlock the potential for 24/7 on-chain liquidity,” providing institutions with a cash-like token that can smoothly interface with smart contracts, DeFi protocols, and on-chain settlement mechanisms.
This initiative follows the success of BlackRock’s BUIDL tokenized U.S. Treasury fund on Ethereum, where each BUIDL token signifies a $1 share in a collection of T-bills and repos, yielding about 4.75%–5.25% annually and being fully programmable as an ERC-20 asset.
Sector analysts note that tokenized Treasury products exceeded $7 billion in assets by early 2026, with issuers like BlackRock, Franklin Templeton, and Ondo Finance leading the market as institutions aim to incorporate risk-free rate yields into on-chain portfolios.
A recent report by crypto.news indicates that SWEEP represents “the next phase” of this trend: rather than just tokenizing Treasuries, it fully encompasses the entire cash management framework, enabling large investors to channel idle stablecoins into a State Street-managed liquidity fund while remaining engaged in the blockchain ecosystem.