Investment bank Standard Chartered (STAN) says decentralized finance (DeFi) is emerging as a powerful alternative to traditional finance, which relies on centralized systems run by trusted authorities like central banks.
The bank forecasted that by the end of 2028, non-stablecoin tokenized assets will reach a market capitalization of $2 trillion, up from $35 billion today, matching the expected size of the stablecoin market.
Tokenized money-market funds and listed equities could each account for roughly $750 billion, with funds, private equity, commodities, corporate debt and real estate making up the remainder, the bank said in the Thursday report.
DeFi, built on blockchain technology, removes the need for a central authority and instead operates on transparency, accessibility and code-based trust, wrote Geoff Kendrick, head of digital assets research at Standard Chartered.
According to Kendrick, the 2025 boom in stablecoins has accelerated DeFi’s shift from a niche crypto-native activity to a mainstream financial force, enabling non-banks to handle payments and savings once dominated by traditional institutions.
The widespread use of stablecoins has increased awareness in developed markets and injected on-chain liquidity that fuels further DeFi innovation, particularly in lending and borrowing, the report said.
Stablecoins are cryptocurrencies whose value is tied to another asset, such as the U.S. dollar or gold. They play a major role in cryptocurrency markets, providing a payment infrastructure, and are also used to transfer money internationally
Kendrick argued that this liquidity and growth in DeFi banking are laying the groundwork for an explosion in tokenized real-world assets (RWA).
Standard Chartered sees this as the start of a self-reinforcing cycle: liquidity creates new products, which in turn attract more liquidity. The main risk, the report noted, is if the United States fails to deliver regulatory clarity before the 2026 midterm elections, though that is not its base case.
