State Street (AUC $46.6T) has effectively ended its “pilot phase” era. The world’s second-largest custodian bank announced today the launch of the State Street Galaxy Onchain Liquidity Sweep Fund (SWEEP), a tokenized private liquidity product debuting on the Solana blockchain. The fund, developed in partnership with Mike Novogratz’s Galaxy Digital, will be seeded with $200 million from Ondo Finance.
Institutional Rails, Public Chains
This is not a sandbox experiment. SWEEP represents a direct integration of State Street’s liquidity management infrastructure with public blockchain rails. Unlike previous private-ledger trials, SWEEP will issue tokens directly on Solana, utilizing PayPal’s PYUSD stablecoin for 24/7 subscriptions and redemptions. The bank confirmed plans to expand to Ethereum and Stellar post-launch.
The move signals a definitive shift in institutional strategy: prioritizing speed and capital efficiency over the walled gardens of private blockchains. By leveraging Solana, State Street is betting on high-throughput execution for institutional cash management, a sector previously dominated by slower, T+1 settlement cycles.
The financial industry is transforming… It is critical we have the tools in place to provide our clients with solutions for both their traditional investment needs as well as their increased digital needs. Ron O’Hanley, CEO of State Street
The Galaxy & Ondo Connection
The structure explicitly bridges TradFi custody with DeFi mechanics. State Street Bank and Trust will act as the custodian for the fund’s treasury assets, while Galaxy’s “Digital Infrastructure” arm handles the tokenization logic.
Ondo Finance’s $200 million seed investment is the catalyst here, effectively bootstrapping liquidity and signaling immediate demand. ONDO tokens reacted sharply to the disclosure, validating the market’s appetite for real-world asset (RWA) plays that bypass theoretical roadmaps for live deployment.
Market Context
State Street’s entry puts it in direct competition with BlackRock’s BUIDL fund, intensifying the race to tokenize the $6 trillion money market industry. With Bitcoin hovering near $96,000 following a 5.5% rally earlier this week, the timing aligns with a renewed “risk-on” institutional sentiment. The bank’s decision to utilize Taurus for custody technology, secured in a deal late last year, further cements its stack for a multi-chain future.
