Ondo Finance Joins State Street and Galaxy to Launch SWEEP

SWEEP is a tokenized liquidity fund created by Ondo Finance, State Street Investment Management, and Galaxy Asset Management. It is designed to bring traditional cash management onchain while keeping the liquidity profile that institutional investors expect from established sweep products. 

The fund targets a launch on Solana in early 2026 and will accept subscriptions and redemptions in PYUSD, a regulated stablecoin issued by Paxos. Only Qualified Purchasers can access the product. The launch also includes a planned anchor investment from Ondo Finance through its OUSG fund.

What Is SWEEP and Why Is It Being Launched

SWEEP, short for the State Street Galaxy Onchain Liquidity Sweep Fund, is a tokenized liquidity vehicle built for institutions that want to hold cash-like assets onchain without losing access to reliable redemption windows. Sweep funds traditionally let investors park idle cash in short-term instruments while maintaining quick convertibility. SWEEP applies this structure to a blockchain environment.

The fund will work with PYUSD for subscriptions and redemptions as long as the fund has assets available to process requests. This detail makes it similar to standard sweep accounts used by banks and asset managers, but with the operational benefits of public blockchain rails. Ondo Finance has committed about $200 million as seed capital for the launch.

“We're beginning to see what's possible when TradFi and DeFi sector players unite – and it's increasingly clear that joint efforts like this stand to have a far-reaching impact on the future of asset management and capital markets," said Kim Hochfeld, Global Head of Cash and Digital Assets for State Street Investment Management

Galaxy Asset Management, an affiliate of Galaxy Digital, will help operate and distribute the fund.

How SWEEP Strengthens OUSG

OUSG, introduced in 2023, is Ondo Finance’s tokenized U.S. Treasuries product. It lets investors access short-term government debt in a tokenized format with near-instant settlement into stablecoins. From its launch, OUSG focused on transparency, clear reporting, daily interest accrual, and redemption reliability.

Since 2023, the product has expanded through several steps:

• Instant subscriptions and redemptions at any time
• Diversified reserves across major tokenized funds
• Multi-chain access on Ethereum, Solana, Ripple, and Polygon
• Institutional-grade reporting and clear proof of reserves

SWEEP adds to this structure by offering another high-quality reserve component. OUSG intends to become the lead anchor investor in the fund. This allocation would diversify its existing holdings, deepen its liquidity, and improve redemption capacity during periods of high onchain demand.

OUSG currently includes exposure to several major tokenized products. These include:

• BlackRock’s BUIDL
• Fidelity’s FDIT
• Franklin Templeton’s BENJI
• WisdomTree’s WTGXX
• Wellington Management and FundBridge Capital’s ULTRA

Adding SWEEP fits into this pattern of broad reserve diversification. The approach strengthens OUSG’s ability to meet redemptions and supports stablecoin liquidity during volatile periods. Because OUSG allows quick conversion into stablecoins, having several reserve sources helps reduce pressure on any single fund.

OUSG’s Growing Ecosystem

OUSG has now grown to more than $770 million in total value locked. It is one of the largest and most widely used tokenized fixed income products. Its appeal comes from its straightforward structure and its ability to serve both crypto-native users and institutional allocators.

OUSG gives investors:

• Daily yield accrual
• Low fees compared to many competing instruments
• Reliable redemption workflows
• Access across multiple blockchains

As SWEEP enters the picture, OUSG’s portfolio will span tokenized funds managed by some of the most established names in global finance. This foundation shows the increasing connection between traditional markets and onchain environments.

Ondo Finance President Ian De Bode said that tokenization is becoming the “connective tissue” between traditional finance and onchain markets. He also said that the firm’s planned investment in SWEEP reinforces OUSG’s mission. 

Why Tokenized Liquidity Funds Matter

Tokenized liquidity funds represent a shift in how financial institutions handle short-term assets. In the past, cash sweep products operated only through internal banking systems. They were limited by business hours and regional clearing structures.

Bringing these instruments onchain has several effects:

• Settlement becomes near real time
• Records are stored on public chains
• Investors see clear audit trails
• Funds can integrate with decentralized applications

For example, a standardized onchain representation of U.S. Treasury exposure allows decentralized finance platforms to integrate safe yield instruments into lending markets. It also gives corporate treasurers the ability to manage fiat reserves through stablecoins without losing traditional liquidity features.

SWEEP aims to fit inside these developing standards. The fund targets institutions that need quick access to cash-like holdings but want the operational advantages of tokenization.

Recent Regulatory Developments Strengthening Ondo’s Position

The SWEEP announcement comes at a time when Ondo Finance is expanding its regulatory footprint. The firm recently secured full approval to offer tokenized stocks and ETFs to retail investors in the European Union and the broader European Economic Area. This approval came from Liechtenstein’s Financial Market Authority, a regulator known for rules that passport financial services across all 30 EEA states.

With this approval, Ondo Global Markets can serve more than 500 million potential investors. They can access tokenized versions of U.S. equities and ETFs under a unified regulatory framework. The structure follows standard investor-protection rules and operates fully within Europe’s supervision requirements.

The SEC Closes Its Investigation Into Ondo Finance

Another recent milestone is the closure of the U.S. Securities and Exchange Commission’s investigation into Ondo Finance. The probe lasted two years and examined whether the firm’s tokenized Treasuries, tokenized equities, and the ONDO token followed securities laws. The investigation ended with no charges filed.

The inquiry began during a period when the SEC was pursuing several enforcement actions in the crypto sector. The environment has changed under current leadership. Paul Atkins, the SEC

Why SWEEP Targets Solana for Its 2026 Launch

SWEEP plans to debut on Solana for several operational reasons. Solana offers high transaction throughput, fast settlement times, and lower fees compared to some other blockchains. These traits are useful for liquidity products, which depend on swift settlement and low operational costs.

Solana has also become a major platform for tokenized assets. Several large funds and stablecoin providers now operate on Solana because its technical structure supports high-volume financial activity. Examples include the expansion of Circle’s USDC functions on the network and the growth of treasury-backed tokens issued by institutional partners.

Conclusion

SWEEP adds a new component to the expanding field of tokenized liquidity products. Built by Ondo Finance, State Street Investment Management, and Galaxy Asset Management, it brings the structure of traditional sweep accounts into an onchain environment. Its integration with PYUSD, its eligibility for Qualified Purchasers, and its planned launch on Solana place it within established financial standards.

For OUSG, SWEEP becomes another reserve option that strengthens liquidity and supports redemption reliability. For State Street and Galaxy, it demonstrates how established financial institutions are now operating on public blockchains. Combined with Ondo’s recent regulatory approvals and the closure of the SEC’s investigation, the launch positions the firm as one of the key operators in modern tokenized finance.

Resources

1. Ondo Finance on X : Posts (December 2025)

2. Announcement from Ondo Finance: State Street Investment Management, Galaxy Digital, and Ondo Finance Announce Plans to Launch Private Tokenized Money Market Fund

3. Report by CoinDesk: State Street and Galaxy to Launch Tokenized Liquidity Fund on Solana in 2026