Tokenization Market Expected to Surge to $2 Trillion by 2028

Standard Chartered Bank has projected a significant rise in the market for tokenized real-world assets, forecasting an increase from approximately $35 billion today to nearly $2 trillion by 2028. This growth is primarily attributed to the expanding role of decentralized finance (DeFi) and the influence of stablecoins on traditional financial systems.

In a recent report, Geoffrey Kendrick, the bank’s head of digital assets research, emphasized that the tokenization of assets, excluding stablecoins, shows immense potential for disruption. Kendrick noted that the surge in stablecoin adoption has established a foundation for various asset classes to transition onto blockchain networks, paving the way for more robust on-chain financial activities.

Ethereum’s Role in the Tokenization Boom

According to Kendrick, a substantial portion of this projected growth will occur on the Ethereum network. He highlighted Ethereum’s reliability, citing that it has operated for over a decade without experiencing a mainnet outage. While some competing blockchains may offer faster transactions or lower costs, Kendrick argues that these advantages are overshadowed by Ethereum’s proven stability and track record.

Standard Chartered estimates that both tokenized money-market funds and listed equities could each account for around $750 billion of the anticipated $2 trillion market. The remaining segments contributing to this growth will include private equity, commodities, corporate debt, and real estate.

Kendrick regards lending and the tokenization of real-world assets as the two key areas where DeFi protocols may significantly challenge and reshape traditional finance. He noted that the evolution of DeFi has effectively transformed it from a niche market into a mainstream financial ecosystem, enabling non-bank entities to participate in managing payments and savings that were previously the domain of banks.

Implications for the Financial Landscape

The report also underscores the rising use of stablecoins in developed markets, which has bolstered on-chain liquidity and driven innovation across various DeFi services, such as lending and borrowing. Kendrick stated, “Stablecoins have created several necessary pre-conditions for a broader expansion of DeFi via the three pillars of increased public awareness, on-chain liquidity, and on-chain lending/borrowing activity in fiat-pegged products.”

Despite its optimistic outlook, Standard Chartered cautions of potential risks, particularly regarding regulatory uncertainties in the United States. The bank expressed concern that if clear guidelines are not established before the 2026 midterm elections, it could hinder the growth of this burgeoning market. Nonetheless, they maintain that this scenario is not their base case.

As the landscape for tokenized assets continues to evolve, stakeholders in the financial sector are closely monitoring these developments, recognizing the transformative potential of blockchain technology in reshaping traditional finance.