Galaxy and State Street Launch Solana-Based SWEEP Tokenized Cash Fund
On Tuesday, U.S. stocks kicked off positively, with major indexes showing gains, particularly in AI-related storage sectors. This uptick occurred even as PayPal’s shares experienced a significant 10% decline due to disappointing profit outlooks.
Summary
- Galaxy Digital, in collaboration with State Street Investment Management, has unveiled the State Street Galaxy Onchain Liquidity Sweep Fund (SWEEP). This innovative tokenized cash management solution seeks to offer continuous liquidity on-chain.
- Institutional investors will have the ability to subscribe and redeem using stablecoins while accruing yield from underlying conventional securities, starting with Solana and with future expansions planned to Ethereum and Stellar.
- Galaxy will provide the necessary tokenization infrastructure, Anchorage Digital will handle digital asset custody, and State Street will oversee the off-chain portfolio, following the institutional trends set by BlackRock’s BUIDL tokenized Treasury fund.
As reported by CoinDesk, SWEEP has been introduced by State Street and Galaxy as a “tokenized private liquidity fund,” with the goal of converting traditional cash and liquidity management products to public blockchains.
SWEEP utilizes Solana for cash management
State Street Investment Management will administer a portfolio of short-duration, investment-grade securities, functioning similarly to a money market or liquidity fund, while Galaxy’s digital infrastructure will manage the issuance and administration of tokenized fund shares on Solana.
Subscriptions and redemptions will involve PayPal USD (PYUSD) stablecoins, enabling eligible investors to move funds in and out of the fund anytime, as long as the portfolio availability allows, effectively eliminating the constraints of bank and market hours.
The initiative is set to commence with an anchor investment of around $200 million from Ondo Finance, which plans to use SWEEP to strengthen its reserves and explore more on-chain liquidity opportunities.
State Street Bank and Trust Company will serve as the custodian for the traditional securities within the fund, while Anchorage Digital provides institutional-grade custody for the digital tokens, thereby establishing a robust connection between off-chain assets and their on-chain equivalents.
A part of a larger tokenized cash and Treasury wave
SWEEP is being launched initially on Solana due to its high throughput and low transaction costs, with plans for future adaptations on Ethereum and Stellar tailored to client activities in existing on-chain environments.
LinkedIn posts from Galaxy and State Street emphasize the fund as a way to “unlock the potential for 24/7 on-chain liquidity,” providing institutions with a cash-like token that can seamlessly interface with smart contracts, DeFi protocols, and on-chain settlement processes.
This launch follows the successful rollout of BlackRock’s BUIDL tokenized U.S. Treasury fund on Ethereum, where each BUIDL token corresponds to a $1 share in a collection of T-bills and repos, providing an annual yield of approximately 4.75%–5.25% and offering full programmability as an ERC-20 asset.
Analysts tracking the sector note that tokenized Treasury products surpassed $7 billion in assets by early 2026, with leading issuers such as BlackRock, Franklin Templeton, and Ondo Finance at the forefront as institutions aim to incorporate risk-free rate yield into on-chain portfolios.
A recent analysis by crypto.news indicates that SWEEP symbolizes “the next phase” of this trend: rather than solely focusing on tokenizing Treasuries, it encompasses the entire cash management framework, allowing large investors to channel idle stablecoins into a State Street-managed liquidity fund while remaining within the blockchain ecosystem.