State Street and Galaxy Officially Launch 'SWEEP' Fund to Monetize Stablecoins on Solana

Global custody bank State Street and Galaxy Asset Management have officially launched the 'State Street Galaxy Onchain Liquidity Sweep Fund (SWEEP)' on the Solana blockchain. This launch marks a significant milestone, signaling the maturing bridge between traditional finance (TradFi) custody services and decentralized finance (DeFi).

Having secured a $200 million seed investment from Ondo Finance, the fund aims to convert idle stablecoins held by institutional investors into yield-generating tokenized assets. This is viewed as a strategic move to fundamentally transform institutional cash management using public blockchains.

The SWEEP fund is designed to provide institutional investors with an efficient means for on-chain liquidity management. Debuting on Solana in early 2026, the fund targets Qualified Purchasers and seeks to overcome the limitations of traditional financial systems through blockchain technology.

We are beginning to witness what is possible when players from the traditional finance (TradFi) and decentralized finance (DeFi) sectors combine. This collective effort is setting a new standard that will have far-reaching implications for the future of asset management and capital markets.

At the core of the fund is the 'Sweep' mechanism. Investors can subscribe to or redeem from the fund using PayPal's stablecoin, PYUSD, allowing for 24/7 fund flow management. This offers a major advantage to institutions by enabling liquidity access without being restricted by traditional banking hours.

Multi-faceted Institutional Partnership and Technical Infrastructure

Leading companies in their respective fields collaborated for the operation of the SWEEP fund. State Street Bank serves as the custodian for the fund's assets, while Galaxy Digital handles the tokenization and issuance infrastructure. Furthermore, it plans to integrate Chainlink's technology to support future cross-chain interoperability.

• ['State Street Bank: Responsible for fund asset custody and management', 'Galaxy Digital: Leading tokenization infrastructure development and asset issuance', 'Ondo Finance: Providing $200 million in initial liquidity and participating as a strategic partner', 'Chainlink: Supporting cross-chain interoperability and data integrity']

State Street and Galaxy chose Solana as the initial launch platform. This decision was based on the assessment that Solana's high throughput and low transaction costs are suitable for operating an institutional-grade liquidity fund. While Ethereum currently plays a pivotal role, occupying 61% of the tokenization market, Solana is rapidly expanding its position as a high-performance alternative.

As of May 2026, the tokenization market is undergoing a significant shift. More than $1 billion has flowed into Solana-related ETFs, and institutional interest is moving from closed 'institutional-only chains' to open networks like Solana and Ethereum. In this environment, the SWEEP fund holds a leading position as an institutional financial product based on an open network.

Future Expansion Plans and Market Outlook

Following a successful launch on Solana, the SWEEP fund plans to expand to the Stellar and Ethereum blockchains to secure broader institutional liquidity. This multi-chain strategy is a key element for absorbing institutional capital distributed across various networks and maximizing the fund's accessibility.

In conclusion, this collaboration between State Street and Galaxy demonstrates that the tokenization of capital markets has moved beyond a mere experimental phase into a stage of practical commercialization. Combining the credibility of a global custody bank with the technical expertise of a digital asset specialist, the SWEEP fund is expected to become a new standard for future asset management.