A strong alliance between State Street Investment Management, Galaxy Asset Management, and Ondo Finance forms the basis for what could become one of the first institutional cash systems that lives natively on public blockchains.
Rather than treating tokenization as an experiment, the three companies position this concept as a core feature of how money will move in the future.
Key points
* State Street, Galaxy, and Ondo are launching a blockchain-based Cash Sweep Fund.
* The fund uses PYUSD and will debut on the Solana network in 2026.
* Ondo plans to fund the fund with $200 million.
* This tripartite project places itself in the growing race to provide on-chain institutional liquidity.
Their joint initiative, known as SWEEP, reimagines the familiar 'cash sweep' model - typically used by institutions to move excess funds into short-term instruments - by transforming this process into blockchain rails. Instead of settling through traditional bank cut-off dates, SWEEP is designed to work continuously and settle using PYUSD, the regulated stablecoin from PayPal.
Unlike most tokenization experimental projects that start small, this fund arrives at an immediate scale. Ondo Finance plans to inject $200 million of its own capital on day one, reinforcing its role as a major provider of tokenized treasury bonds and credit-backed real-world assets (RWAs). Galaxy Digital's technology bundle will power the blockchain side, while State Street Bank and Trust Company will oversee custody in line with institutional requirements.
Although the partners ultimately aim to operate on multiple networks, the first deployment of the system is scheduled on the Solana network in early 2026, followed later by the Stellar and Ethereum networks, enabled by Chainlink's CCIP protocol for cross-chain movement of equities and liquidity.
Tokenized cash becomes a battleground for global asset managers
What makes this partnership significant is not just its size, but its timing as well. There has been a quiet race among some of the largest asset managers on the ground to define what 'cash on-chain' should look like.
BlackRock and Franklin Templeton have already launched tokenized liquidity tools, and Ondo's products are widely used in cryptocurrency markets that need exposure to short-term treasury bonds. With this move, the State Street and Galaxy alliance adds another heavyweight competitor, indicating that tokenized money market products have quickly become a leading competitive category in traditional finance.
The leaders behind the project say that tokenization is no longer just a theoretical idea. Kim Hochfeld from State Street describes tokenization as the next iteration of institutional infrastructure, while Ondo's president, Ian De Bode, states that tokenized treasury bonds and 24/7 issuance and redemption mechanisms pave the way for a new financial backbone.
More than just a fund - a piece of a larger market structure on-chain
The launch of SWEEP comes alongside a broader shift as tokenized assets begin to interlink like components of a more complete capital markets system.
For instance, Superstate has begun enabling public companies to raise equity directly on the blockchain, bypassing outdated settlement systems and delivering shares directly to investors' wallets. Tokenized equities, tokenized liquidity funds, and interchain operating tools increasingly serve as layers for the same emerging bundle.
Within this bundle:
* State Street acts as the regulated supervisory layer.
* Galaxy provides the technological rails.
* Ondo contributes liquidity and a distribution network.
This division of roles reflects how the financial industry is reorganizing itself around tokenized markets.
Solana's early advancement in the tokenization arena
The choice of the Solana network as the venue for SWEEP's debut highlights a second competitive race - not among asset managers, but between blockchains themselves. The extremely low fees and high throughput of Solana have made it a magnet for issuers building tokenized assets and institutions experimenting with real-time settlement.
Companies like Western Union and Pfizer have already chosen Solana to support parts of their payment and digital asset strategies. The network now hosts nearly one billion dollars solely in physically-backed ETFs, indicating that institutional adoption is spreading beyond early experimental projects.
The launch of SWEEP on Solana gives the fund immediate access to an environment where stablecoins, real-world assets (RWAs), and high-speed settlement are already deeply integrated. The expansion to Stellar and Ethereum will broaden the fund's reach into ecosystems where institutional stablecoin activity and tokenized treasury bonds are already well established.
