Tokenization Market Set to Surge to $2 Trillion by 2028

Standard Chartered Bank has projected a significant rise in the market value of tokenized real-world assets (RWAs), excluding stablecoins, estimating it could grow from approximately $35 billion today to nearly $2 trillion by 2028. This forecast, outlined by the bank’s head of digital assets research, Geoffrey Kendrick, indicates a robust trend towards the tokenization of various asset classes, driven primarily by the ongoing evolution in decentralized finance (DeFi).

Kendrick’s analysis highlights the substantial role that stablecoin adoption has played in transforming DeFi from a niche sector into a mainstream financial ecosystem. He noted that this growth is empowering non-bank entities to manage functions traditionally controlled by banks, such as payments and savings. The report also anticipates that most of this on-chain activity will occur on the Ethereum network, which has established a reputation for stability and reliability.

Market Dynamics and Structure

The anticipated expansion of the tokenization market underscores a broader shift in the financial landscape. Kendrick estimates that both tokenized money-market funds and listed equities could account for approximately $750 billion each within the projected $2 trillion market. Other asset classes, including private equity, commodities, corporate debt, and real estate, are expected to contribute to the remaining market share.

Kendrick emphasized that Ethereum’s long-standing operational history—over a decade without a mainnet outage—sets it apart from competing blockchains. He argued that factors such as transaction speed and lower costs on alternative platforms are “irrelevant” when compared to Ethereum’s proven track record.

The growth trajectory for tokenized assets is also reflected in the increasing liquidity and innovation within the DeFi sector. Kendrick pointed out that the surge in stablecoin use in developed markets has enhanced on-chain liquidity, fostering new developments in services like lending and borrowing.

Potential Risks and Regulatory Landscape

While Standard Chartered maintains an optimistic outlook for the tokenization market, it also cautions about potential risks, particularly concerning regulatory frameworks in the United States. The bank warns that a lack of clear regulations prior to the 2026 midterm elections could pose challenges to market stability and growth. Nevertheless, Kendrick asserts that such regulatory uncertainty is not the bank’s base case.

The report concludes by reinforcing the significance of stablecoins in setting the groundwork for a broader expansion of DeFi, which relies on three key pillars: increased public awareness, on-chain liquidity, and active lending and borrowing in fiat-pegged products. As the financial landscape continues to evolve, the implications of these changes could reshape traditional financial systems and pave the way for innovative financial solutions.