State Street Investment Management and Galaxy Asset Management have launched the State Street Galaxy Onchain Liquidity Sweep Fund (SWEEP), a tokenized cash-management vehicle for large institutional investors. According to reports from CoinDesk, the fund allows qualified institutional investors to deposit stablecoins, earn interest income, and move funds at any time. Unlike traditional money market funds, SWEEP runs on blockchain infrastructure 24 hours a day, allowing continuous operations rather than during market hours. The fund is available to Qualified Purchasers that meet certain eligibility criteria and minimum investment amounts, with investors able to use PayPal USD (PYUSD) stablecoins for subscriptions and redemptions, subject to portfolio availability. As per the latest company announcement, the minimum initial subscription to the Fund is Risk of Loss, with no guarantee or representation made that the Fund's investment program will be successful.
The fund operates differently from traditional money market funds, running continuously on blockchain infrastructure rather than during market hours. As reported by CoinDesk, the new structure allows investors to move in and out at any time, unlike traditional money market funds that operate during market hours. State Street Investment Management will run the underlying portfolio of short-duration, investment-grade securities—functionally similar to a money market or liquidity fund—while Galaxy's digital infrastructure issues and manages tokenized fund shares on Solana. Anchorage Digital serves as the fund's digital custodian for stablecoin investments, while State Street Bank and Trust Company serves as the fund's custodian for securities holdings. The fund will launch first on the Solana blockchain and later expand to Ethereum and Stellar networks, with the firms choosing Solana for its high throughput and low transaction costs to meet clients where their existing on-chain activity resides.
The fund is expected to debut with an anchor investment of roughly $200 million from Ondo Finance, whose OUSG tokenized Treasury fund will use SWEEP to further diversify its reserves and access additional on-chain liquidity options. According to CoinDesk, Galaxy Digital and State Street Investment Management have rolled out SWEEP, a "tokenized private liquidity fund" designed to migrate traditional cash and liquidity management products onto public blockchains. The product is framed as a way to "unlock the potential for 24/7 onchain liquidity" by giving institutions a cash-like token that can plug directly into smart contracts, DeFi protocols, and on-chain settlement flows. State Street Bank and Trust Company will serve as custodian for the fund's traditional securities holdings, while Anchorage Digital provides institutional-grade custody for the digital tokens, completing what the partners describe as a full-stack link between off-chain assets and on-chain representations.
The fund carries significant risks that investors must carefully consider before participation. As per the latest company information, the Fund is not a "money market fund" registered with the U.S. Securities and Exchange Commission (SEC). Key risks include low short-term interest rates where the Fund's yield can be very low, potential for negative yield during market conditions, focused investment risk as the fund is expected to invest a large percentage of assets in treasury securities, and repurchase agreement risk where counterparty defaults could result in losses. Additionally, transacting on the blockchain involves a high degree of risk, with tokens having no intrinsic value, limited regulatory certainty, and exposure to fraud and potential market manipulation. The fund carries a high degree of risk and potential lack of liquidity, making it suitable only for highly speculative investors willing to accept substantial or complete loss of investment.
The launch builds on the rapidly growing market for tokenized funds, led by products like BlackRock's BUIDL, which packages short-term U.S. Treasury exposure into a blockchain-based token. According to reports from CoinDesk, BUIDL has attracted billions of dollars, signaling that institutions are willing to hold tokenized versions of familiar instruments when the structure meets compliance and liquidity needs. Tokenized Treasury products crossed $7 billion in assets in early 2026, with issuers such as BlackRock, Franklin Templeton, and Ondo Finance driving most of the growth as institutions look to bring risk-free rate yield into on-chain portfolios. The product launch adds to the expansion of the tokenized-fund market, highlighting the gradual adoption of blockchain-based financial products by institutional investors.
