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Standard Chartered Bank predicts that decentralized finance (DeFi) will evolve into a mainstream financial system rivaling traditional finance (TradFi) by 2028. The bank projects that tokenized real-world assets (RWAs) will reach a combined value of $2 trillion within the next three years.
According to the bank’s analysis, this growth will be fueled by a cycle of liquidity and innovation triggered by the strong performance of stablecoins in 2025. Stablecoins, which now serve as key on-chain payment instruments, have expanded blockchain finance beyond the crypto niche and into the broader financial ecosystem.
The report suggests that non-stablecoin tokenized assets will grow from $35 billion today to $2 trillion by 2028, matching the expected stablecoin market size. Geoff Kendrick, Head of Digital Assets Research at Standard Chartered, stated that DeFi operates through transparency, accessibility, and code-based trust, making it a credible challenge to traditional financial systems.
Kendrick explained that stablecoins have created the foundation for other asset classes, such as tokenized money market funds and equities, to scale on blockchain networks. These developments have boosted on-chain liquidity, lending, and payments that were previously managed by traditional banks.
He noted that the liquidity created by stablecoins has generated a “flywheel effect,” producing new products that attract more users and strengthen the overall DeFi ecosystem. This self-reinforcing loop, he said, is what will push tokenized assets to mainstream adoption.
According to the study, Ethereum remains the dominant blockchain driving this transition due to its proven uptime, reliability, and developer community. Kendrick stated that while other networks may offer lower costs or faster transactions, Ethereum’s stability gives it a critical advantage in institutional tokenization.
The report estimates that by 2028, tokenized money market funds and listed equities will each account for approximately $750 billion of the projected $2 trillion total. The remaining $500 billion will come from tokenized funds, private equity, commodities, corporate debt, and real estate.
Stablecoins have already become a central pillar of on-chain liquidity, supporting both lending and borrowing across DeFi platforms. The current stablecoin market capitalization stands at around $308 billion, led by Tether’s USDT at $183.39 billion and Circle’s USDC at $75.82 billion. Other emerging players include Ethena’s USDe, with $9 billion, Sky Dollar's USDS, with $5 billion, and DAI, with $4.8 billion.
Kendrick stated that the strong 2025 performance of stablecoins allowed non-banking entities to handle payments and savings, generating liquidity that supports lending and investments across the blockchain. As more traditional instruments move on-chain, the DeFi ecosystem becomes increasingly competitive with legacy financial systems.
Despite the optimistic forecast, Standard Chartered cautioned that US regulatory uncertainty remains a key risk. The bank warned that without clear digital asset regulations before the 2026 midterm elections, tokenization growth could face delays.
The report compared the U.S. to regions like the European Union, the UK, and Singapore, which already have clearer frameworks for digital assets. The EU’s Markets in Crypto-Assets Regulation (MiCA) has been instrumental in establishing licensing standards, with nearly 40 crypto providers already approved.
The bank’s findings suggest that jurisdictions with supportive regulations will lead the next wave of tokenization and DeFi expansion. Will the United States risk falling behind in the race for blockchain financial innovation?
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Standard Chartered projects DeFi and tokenized assets to reach $2 trillion by 2028, fueled by stablecoin expansion and Ethereum’s reliability. The bank urges clear US regulations to sustain momentum as Europe and Asia advance tokenization frameworks and strengthen blockchain-based financial innovation.
