Competing for on-chain liquidity with SOL-based sweep funds
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Sweep is structured to purchase and redeem PayPal's stablecoin (PYUSD) for accredited investors. Ondo Finance will invest $200 million (KRW 295.16 billion) in initial capital to directly connect major tokenized real asset (RWA) issuers to State Street's tokenization infrastructure. The fund will utilize Galaxy Digital's infrastructure, and State Street Bank Trust Company will handle custody.
The fund will initially launch on the Solana (SOL) blockchain early next year. It will then expand to Stellar and Ethereum (ETH) using Chainlink's Cross-Chain Interoperability Protocol (CCIP). The three companies have outlined their strategy for implementing on-chain cash, enabling instant settlement and redemption within a multi-ecosystem where stablecoins and RWA tokens are already established.
This launch coincides with the intensifying competition surrounding on-chain cash definitions targeting institutional investors. BlackRock and Franklin Templeton already operate tokenized money market funds and short-term bond funds on public blockchains. Ondo Finance has been building an on-chain structure that connects US Treasury bonds and credit exposures to the cryptocurrency market.
Kim Hochfeld, Global Head of Cash and Digital Assets at State Street Investment Management, said, "Our collaboration with Galaxy will accelerate the innovation of the on-chain, traditional financial ecosystem." Ian De Bode, President of Ondo Finance, said, "Tokenization is key to connecting traditional finance with the on-chain economy. This fund will provide institutional investors with access to short-term U.S. Treasury securities with 24-hour issuance and redemption."
The industry sees this collaboration as a signal that tokenized funds and stocks are moving beyond individual experiments and into an on-chain capital market stack. This is because it combines the regulatory compliance and custody capabilities of traditional financial firms, the infrastructure and tokenization expertise of digital asset companies, and the RWA distribution network within a single product.
Solana's selection as the first launch chain is also noteworthy. Its low fees and fast settlement speeds have earned it recognition as a suitable platform for tokenized assets and high-throughput transactions. Sweep, which began with Solana and will expand to Stellar and Ethereum, is expected to further accelerate competition for institutional investors' on-chain cash management.
Reporter Jeong Ha-yeon yomwork8824@blockstreet.co.kr
