State Street and Galaxy Digital's new tokenized liquidity fund to support PYUSD

State Street Investment Management and Galaxy Digital have launched a tokenized liquidity fund aimed at giving institutional investors a way to move idle cash on-chain and earn yield in real time.

The State Street Galaxy Onchain Liquidity Sweep Fund (SWEEP), announced May 5, is built initially on the Solana blockchain, with plans to expand to Ethereum and Stellar. The fund allows subscriptions and redemptions using PayPal USD (PYUSD), according to the official release.

SWEEP allows subscriptions and redemptions using PYUSD

The launch comes as asset managers look to modernize how cash is managed. Globally, money-market funds hold roughly $6 trillion in assets, forming a core part of institutional treasury operations. By contrast, tokenized U.S. Treasury products, while growing quickly, remain much smaller, estimated in the tens of billions of dollars, though expanding at rapid rates as more firms test blockchain rails.

State Street, which oversees more than $5 trillion in assets, is now directly entering that space alongside firms such as BlackRock and Franklin Templeton, both of which have launched tokenized treasury offerings.

Rather than operating as a pilot, SWEEP integrates core fund operations—subscriptions, redemptions, valuation, and reporting—onto blockchain infrastructure, allowing investors to move funds continuously instead of within traditional market hours.

“This fund allows us to bring the TradFi landscape onchain in a resilient way, guided by our long-standing focus on innovation, risk management and client outcomes,” Yie-Hsin Hung, president and chief executive of State Street Investment Management, said in the company’s announcement.

Galaxy Digital to provide the blockchain infrastructure

Galaxy provides the blockchain infrastructure supporting the issuance and management of the fund, while Anchorage Digital serves as custodian for the stablecoin holdings. State Street Bank and Trust Company retains custody of traditional assets, and NAV Consulting acts as transfer agent.

The fund also uses technology from Chainlink to publish daily net asset value data on-chain and enable interoperability across different blockchains.

The launch expands an existing relationship between State Street and Galaxy Digital, which began in 2024 with a set of exchange-traded funds focused on digital assets.

“For years we’ve argued that traditional finance and crypto would converge on the same rails,” Galaxy founder and CEO Mike Novogratz said in the same announcement. “We believe SWEEP is what that looks like in practice, with a fund managed by an experienced cash manager being available for investors onchain, on infrastructure Galaxy built for institutions.”

What comes next?

SWEEP was first outlined in late 2025, when Ondo Finance signaled a potential $200 million seed allocation through its OUSG fund, according to State Street materials, though it was not mentioned in the final launch announcement.

The rollout now serves as a real-world test: whether institutional investors are ready to shift even a portion of their vast cash holdings onto blockchain infrastructure.

For State Street and its peers, the bet is straightforward—if even a small share of the multi-trillion-dollar money-market ecosystem moves on-chain, tokenized liquidity funds like SWEEP could become a standard tool for managing capital globally.

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