Standard Chartered's $4 trillion tokenization forecast splits evenly between stablecoins and RWAs, with DeFi protocols capturing loan and deposit flows. Institutional links like Coinbase-Morpho show early adoption, but regulatory and smart contract risks remain.
Standard Chartered published a forecast on May 18 that $4 trillion in tokenized assets will sit on blockchain networks by the end of 2028. The bank splits the total evenly between stablecoins and tokenized real-world assets (RWAs). DeFi protocols, the report argues, will become the core infrastructure layer for those assets.
Geoff Kendrick, global head of digital assets research at Standard Chartered, said the transition from traditional finance to DeFi is already underway. The bank sees three multiplicative drivers: more assets moving on-chain, a higher share of those assets deposited into DeFi, and increased lending activity against on-chain collateral. Each factor amplifies the others, raising protocol activity and token prices.
The bank's thesis rests on composability – the ability for tokenized assets to settle instantly, trade continuously, support permissionless issuance, and serve multiple functions simultaneously. A single on-chain position can earn yield, collateralize a loan, and remain liquid. That improves capital efficiency compared with traditional financial rails where the same asset cannot easily perform all three roles at once.
Standard Chartered identified three specific channels for higher DeFi throughput:
The bank described these drivers as multiplicative for both protocol activity and token prices. A surge in tokenized supply, combined with higher deposit and lending rates, can push DeFi total value locked well above the current baseline.
Standard Chartered cited Coinbase and Morpho as a live example of institutional DeFi infrastructure. Coinbase provides front-end and custody services for a bitcoin lending product. Morpho supplies the lending logic, the liquidation engine, and the capital pool. The product has about $1.75 billion in loans across 22,000 borrowers.
The Coinbase-Morpho arrangement shows how traditional finance can use DeFi back-end infrastructure without exposing clients to raw protocol risk. The custodian handles onboarding and security. The protocol handles market making and liquidations. This model reduces the operational burden for banks and asset managers exploring tokenized lending.
Established protocols are likely to benefit first. Standard Chartered said operators will favor platforms with strong risk metrics and professional governance. That favors protocols with audited code, proven liquidation mechanisms, and institutional-grade oracle setups.
The bank highlighted five specific risks that could slow adoption or reduce the total addressable market:
Practical rule: Each risk category maps to a specific failure mode. Smart contract risk is a tail event. Regulatory uncertainty is a timeline risk. Traders should track which risk materializes first.
Other projections show a similar institutional buildout. Binance Research estimated tokenized assets could reach $1.6 trillion by 2030, with Treasury products, gold-backed commodities, and tokenized public equities among the clearest adoption areas. Chainalysis reported RWAs were approaching $30 billion in assets under management. Separate market data showed the tokenized RWA market reached at least $34.5 billion in May, with some reports citing a $37.5 billion market capitalization after roughly 100% year-over-year growth.
BTC’s slide toward $76,000 pushed bitcoin sentiment into bearish territory, according to Santiment. The firm said retail pessimism hit its highest levels in months. A contrarian read would note that tokenization forecasts are long-duration bets that do not depend on near-term BTC price direction. The institutional buildout continues even when retail sentiment sours.
Signals that support the forecast:
Signals that undermine the forecast:
Standard Chartered concluded: "The transition from TradFi to DeFi is underway. DeFi protocols are the infrastructure native to tokenised assets – they are the exchanges, clearinghouses, lending desks, and asset managers of the tokenised world, running as autonomous software."
For traders, the key question is which protocols capture the flow. The bank’s framework favors platforms with proven risk management and institutional-grade governance. Execution risk remains high until the regulatory landscape firms up. The $4 trillion target is a ceiling, not a baseline. Current RWAs at roughly $35 billion imply about a 14x increase over the next four and a half years. That is an aggressive compound annual growth rate that requires both regulatory tailwinds and flawless technical execution.
Related reading: Crypto Lending Rebuilds: Two Models, One Unresolved Risk Question shows how lending protocols are restructuring after recent failures. Nine Red Flags That Catch Most Altcoin Failures applies directly to RWA tokenization projects that lack audit transparency.
AlphaScala data note: ORCL (Oracle Corporation) carries an Alpha Score 50/100, labeled Mixed, in the Technology sector. While not directly tied to tokenization, Oracle’s database and cloud infrastructure support many blockchain networks. The score reflects balanced fundamentals but no near-term catalyst from the tokenization trend.
Prepared with AlphaScala research tooling and grounded in primary market data: live prices, fundamentals, SEC filings, hedge-fund holdings, and insider activity. Each story is checked against AlphaScala publishing rules before release. Educational coverage, not personalized advice.