Ondo Finance to invest $200M in seed capital for tokenized liquidity fund

State Street Investment Management, the asset management arm of State Street Corporation (NYSE: STT), and Galaxy Asset Management, an affiliate of Galaxy Digital (Nasdaq/TSX: GLXY), announced the forthcoming launch of the State Street Galaxy Onchain Liquidity Sweep Fund (SWEEP) on Dec. 10.

Popular tokenization platform Ondo Finance is expected to invest $200 million in seed fund into the tokenized private liquidity fund.

Related: SEC ends Ondo probe, marking biggest regulatory win yet for tokenization

SWEEP will rely on State Street’s long experience in cash and liquidity management and Galaxy Digital’s expertise in tokenization and digital infrastructure to offer an onchain cash management solution to select investors.

SWEEP will unlock the potential for 24/7 onchain liquidity by deploying PayPal USD (PYUSD) stablecoins for subscriptions and redemptions, given it is available from the fund’s portfolio, the statement read.

Galaxy aims to deploy Chainlink to support cross-chain interoperability so that SWEEP tokens can move across chains.

Qualified purchasers meeting eligibility criteria and the minimum investment threshold will be able to access the fund.

Expected to launch on the Solana blockchain in early 2026, SWEEP is anticipated to integrate with other blockchain networks, including Stellar and Ethereum.

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Ondo Finance President Ian De Bode said, “Tokenization is rapidly becoming the connective tissue between traditional finance and the onchain economy, and SWEEP represents a major leap forward in that evolution.”

"This collaboration with State Street and Galaxy shows how leaders in TradFi, DeFi and tokenization can come together to accelerate the transition to a more open, onchain financial system.”

Kim Hochfeld, global head of cash and digital assets for State Street Investment Management, said, “By partnering with Galaxy, we will push the envelope together and drive the evolution of the TradFi landscape onchain."

“SWEEP is a game-changing collaboration that will offer digital investors an onchain liquidity fund option, reimagining the way institutional DeFi investors hold cash and manage their operations,” said Galaxy's global head of asset management Steve Kurz.