Standard Chartered: In the 2028s, the tokenized asset size could reach $4 trillion! DeFi’s structural “magic” will make 1+1=3

Standard Chartered predicts that by the end of 2028, the global on-chain tokenized asset market will reach $4 trillion. DeFi has the advantages of composability and strong risk-control capabilities, making it the infrastructure of choice for traditional financial giants.

Global capital markets are undergoing an unprecedented wave of “on-chain” migration. Standard Chartered forecasts that by the end of 2028, the size of “tokenized assets” operating on blockchain worldwide will reach $4 trillion; and the biggest beneficiaries of this massive capital surge will be those DeFi protocols that have already been battle-tested and have mature risk management mechanisms in place.

This forecast combines two earlier predictions by Geoffrey Kendrick, Global Head of Digital Asset Research at Standard Chartered: by the end of 2028, the supply of stablecoins will reach $2 trillion; at the same time, the market size of tokenized real-world assets (RWA) will also climb to $2 trillion.

The magic that traditional banks can’t do: DeFi’s “composability” makes 1 + 1 = 3

Why is Standard Chartered so optimistic about DeFi’s prospects? Geoffrey Kendrick points to the blockchain’s structural advantage—“composability.” He says this is a kind of magic that lets capital efficiency produce “1+1=3,” something that cannot be found in the traditional finance (TradFi) system.

On a shared blockchain ledger, the same capital position can “simultaneously” serve three purposes: earning stable passive returns, acting as loan collateral, and maintaining full liquidity.

“This is impossible in the off-chain world of traditional finance,” Geoffrey Kendrick explains. To achieve the same multi-functional use cases in traditional markets, investors must spread capital across different trading platforms and intermediary institutions, and every step requires time and cost.

Geoffrey Kendrick uses BlackRock’s tokenized U.S. Treasury money market fund “BUIDL,” with a scale of $2.85 billion, as a perfect example to illustrate this concept. The fund not only earns a stable yield of about 4% from U.S. Treasury yields, but can also be converted into DeFi-compatible tokens (sBUIDL). It can then be used directly as collateral across major lending protocols to enable 24/7 trading; it even becomes a core reserve asset for stablecoin projects Ethena (USDtb) and Ondo (OUSG). All of these seamless operations can be automatically completed without needing cumbersome bilateral system integrations.

Armies of Wall Street are pressing in: treating DeFi as “underlying infrastructure”

The report also notes that the scale of assets that have not yet moved on-chain is more than 1,000 times that of on-chain assets. Geoffrey Kendrick believes that “institutional-grade asset tokenization” is likely to be the main engine driving the next market explosion. As traditional financial institutions actively move large volumes of assets onto the blockchain, those long-established DeFi protocols with strong risk management capabilities—able to scale securely and efficiently—will become the preferred partners in the eyes of traditional powerhouses, and the token prices of these protocols will naturally rise as well.

When traditional Wall Street operators begin moving assets onto the chain at scale, they will inevitably prioritize established DeFi protocols with steady risk metrics, which will also push up the tokens’ prices for these protocols.

In fact, the trend of integration between traditional finance and DeFi has already begun to show up clearly in the data. Taking Aave, the currently largest DeFi lending protocol, as an example: if compared to U.S. real-world bank institutions, Aave’s asset scale is already ranked as the 38th largest in the United States. The report mentions that the platform currently sees daily on-chain stablecoin lending transaction volume of as much as $1.5 billion to $2 billion, and the average loan size per transaction continues to increase.

Another highly indicative case is the Bitcoin lending product launched through the partnership between Coinbase, the largest cryptocurrency exchange in the U.S., and DeFi protocol Morpho. This clearly shows how traditional financial institutions use DeFi as “back-end infrastructure,” rather than spending enormous capital to build from scratch. In this collaboration, Coinbase handles the front-line customer interface and asset custody; Morpho provides the underlying lending logic, liquidation engine, and liquidity pools. Currently, the lending scale of this product has reached $1.75 billion, attracting over 2.2 million borrowers.

Despite a DeFi hacking incident occurring in April this year that caused a brief bout of market turbulence, Standard Chartered still firmly believes that the RWA market size will reach $2 trillion in the future. Standard Chartered believes this industry is only “facing headwinds, but not collapsing.”

Looking ahead, Geoffrey Kendrick states that the recent U.S. “CLARITY Act” will become the most weighty catalyst in the short term, with the potential to comprehensively accelerate the flow of global capital from traditional financial systems into the DeFi space.

• This article is reprinted with permission from: 《BlockBeats》
• Original title: 《DeFi Protocols Become Biggest Winners! Standard Chartered: Tokenized Assets Will Reach $4 Trillion by 2028》
• Original author: Block Sister MEL