State Street to launch tokenised fund servicing

State Street announced the launch of its Digital Asset Platform on January 15, 2026, marking a significant expansion of the custody bank's blockchain and tokenization capabilities. The platform represents a foundational infrastructure designed to support State Street's strategic objective of becoming "the bridge between traditional and digital finance," according to Joerg Ambrosius, president of Investment Services at State Street. The platform enables development of core tokenized products including money market funds, ETFs, tokenized assets, deposits, and stablecoins across both private and public permissioned blockchain networks.

The platform architecture incorporates wallet management, custodial services, and cash capabilities alongside enhanced security, operational controls, and on-chain compliance features. Donna Milrod, chief product officer for State Street, emphasized that the infrastructure moves the organization "beyond experimentation and into practical, scalable solutions that meet the highest standards of security and compliance." The system integrates with existing State Street infrastructure, providing institutional clients with seamless interfaces between digital and traditional financial services.

Concurrent with the platform launch, State Street Investment Management and Galaxy Digital announced plans to launch SWEEP (State Street Galaxy Onchain Liquidity Sweep Fund) in early 2026, targeting institutional investors requiring around-the-clock cash management capabilities. The fund will accept subscriptions and redemptions in PYUSD, a stablecoin issued by Paxos, restricted to Qualified Purchasers meeting specified investment thresholds. Ondo Finance committed approximately $200 million as seed investment. The fund will initially launch on the Solana blockchain, with planned expansion to Stellar and Ethereum networks, utilizing Chainlink infrastructure for cross-chain data and asset transfers. Kim Hochfeld, global head of cash and digital assets at State Street, characterized the partnership as reflective of a broader shift in how traditional finance and cryptocurrency firms collaborate.

State Street's tokenization initiative positions the bank to address rising institutional demand for digitized versions of traditional financial products rather than developing crypto-native vehicles. This approach contrasts with earlier experimental phases, offering tokenized structures that maintain regulatory alignment with existing fund frameworks. The strategy aligns with competitive moves by peer institutions: BNY Mellon recently activated a tokenized deposit service, and Franklin Templeton updated institutional money-market funds to support blockchain-based settlement and ownership records. State Street's existing role servicing crypto markets and its 2026 digital-asset custody expansion provide operational foundation for these new product offerings.