State Street Investment Management announced on December 10 and 11, 2025 that it has entered into a partnership with Galaxy Digital to launch the State Street Galaxy Onchain Liquidity Sweep Fund (SWEEP). The fund will be tokenized and will use PayPal’s PYUSD stablecoin for subscriptions and redemptions, with an anticipated $200 million seed investment from Ondo Finance. SWEEP is slated to debut on the Solana blockchain in early 2026, with future integrations planned for Stellar and Ethereum.
State Street Bank and Trust Company, an affiliate of State Street Investment Management, will serve as custodian for the fund’s treasury holdings, while Galaxy Digital will provide the tokenization technology and secure digital infrastructure. The partnership is designed to offer 24/7 on‑chain liquidity to qualified purchasers—defined as institutional investors with a minimum investment threshold of $10 million and who meet regulatory compliance requirements. The fund will generate yield‑bearing cash by investing the underlying assets in a diversified portfolio of high‑quality, short‑duration debt instruments, allowing investors to earn a modest, stable return while maintaining liquidity on the blockchain.
The announcement comes on the heels of State Street’s Q3 2025 earnings, which reported revenue of $3.545 billion—up 5% YoY—and earnings per share of $2.78, beating analyst expectations by $0.21. The earnings beat was driven by strong fee income from core asset‑management services and disciplined cost control, offsetting a modest decline in legacy banking fees. Management indicated that the company’s guidance for Q4 2025 remains positive, with expectations of stable or slightly increased net interest income and a focus on maintaining operating leverage. The SWEEP partnership aligns with State Street’s broader digital‑asset strategy, which includes plans to launch a dedicated digital‑asset custody business in 2026.
By combining State Street’s established cash‑management capabilities with Galaxy Digital’s blockchain expertise, the SWEEP fund positions both firms at the forefront of tokenized cash‑management solutions for institutional investors. The use of PYUSD is expected to broaden the stablecoin’s institutional adoption, while the 24/7 on‑chain liquidity addresses a growing demand for continuous market access. Competitors such as BlackRock and Franklin Templeton are also exploring tokenized cash vehicles, making this partnership a strategic move to capture a share of the emerging market for on‑chain liquidity services.
"Innovation and partnership are at the heart of our ethos," said Kim Hochfeld, Global Head of Cash and Digital Assets at State Street Investment Management. "By partnering with Galaxy, we will push the envelope together and drive the evolution of the TradFi landscape on‑chain." Steve Kurz, Global Head of Asset Management at Galaxy, added, "SWEEP is a game‑changing collaboration that will offer digital investors an on‑chain liquidity fund option, reimagining the way institutional DeFi investors hold cash and manage their operations."
Ian De Bode, President of Ondo Finance, noted, "Tokenization is rapidly becoming the connective tissue between traditional finance and the on‑chain economy, and SWEEP represents a major leap forward in that evolution."
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