Tokenisation is poised for a staggering structural expansion over the next few years, projected to balloon by approximately 5,600% to become a massive $2 trillion market by 2028, according to a recent research note from major international banking institution Standard Chartered.
At the very core of this exceptionally bullish long-term forecast is the continued, rapid expansion of decentralised finance lending, anchored heavily by the widespread adoption of stablecoins. The British multinational bank views these blockchain-based digital currencies as the critical financial rails enabling traditional, real-world assets—ranging from conventional equities and corporate bonds to physical commodities and various institutional funds—to migrate seamlessly onto public and private ledgers.
According to Geoffrey Kendrick, the global head of digital assets research at Standard Chartered, the ultimate advantage of this technological transition lies in its universal compatibility and settlement efficiency. In a note shared directly with financial publication DL News, Kendrick highlighted that all underlying assets and financial infrastructure ultimately reside on the exact same shared ledger, allowing them to interact fluidly without the traditional administrative barriers, friction points, or settlement delays that typically plague legacy financial systems.
This remarkably optimistic industry outlook arrives during a period of notable turbulence within the broader decentralised finance space, a sector that has recently faced severe shocks capable of temporarily undermining investor confidence onchain.
DeFi Rebound
Earlier in April, the digital asset ecosystem was rattled when a nearly $300 million exploit hit the Ethereum-based liquid restaking protocol KelpDAO. The security breach sent immediate shockwaves through the broader market, triggering an aggressive, panic-driven bank run on Aave, one of the premier decentralised lending platforms operating within the blockchain economy.
As nervous depositors rushed to withdraw their capital, Aave experienced a dramatic capital flight, losing an estimated $17 billion in total deposits alongside a $5.5 billion reduction in active loans in an exceptionally short timeframe. Kendrick described the sudden liquidity squeeze and subsequent panic as one of the most severe and testing decentralised finance shocks observed in recent memory.
Yet, rather than fracturing under the immense pressure or succumbing to systemic collapse, the decentralised finance community demonstrated a high degree of resilience and coordinated crisis management. In a swift counter-response, a coalition of prominent decentralised finance protocols, venture-backed entities, and industry stakeholders rapidly mobilised to pool resources, successfully raising more than $300 million to stabilise the system, cover the shortfalls, and restore necessary backing ratios across affected lending pools.
While the high-profile hack vividly exposed persistent technical vulnerabilities and briefly dented institutional confidence, Kendrick argues that the isolated incident does not alter or derail the fundamental, long-term growth engine driving the broader tokenisation movement.
Instead, the speed and efficiency of industry-led stabilisation efforts, coupled with ongoing structural upgrades to smart contract security, serve to reinforce the long-term investment case for decentralised finance banking architectures. These systems, powered by stablecoin liquidity and transparent lending markets, remain the twin pillars supporting the bank’s projected milestone of a $2 trillion real-world asset market by the close of 2028.
Onchain Banking Boom
Looking ahead over the medium term, Kendrick stated that he expects a major decentralised finance banking bonanza as institutional capital increasingly seeks out operational efficiency.
Lending within the decentralised finance ecosystem inherently lowers the overall cost of capital because its architecture is constructed entirely upon the principle of composability. This design philosophy allows various financial products and protocols to function far more harmoniously and cooperatively than the fragmented silos found in traditional finance.
In simple terms, a single digital asset can perform multiple financial functions simultaneously within a blockchain environment. The same underlying token can continuously generate passive returns, serve instantly as secure collateral to back a short-term liquidity loan, and remain fully available for active trading or transfer without requiring complex unwinding procedures. According to the Standard Chartered report, this unique multi-use capability effectively increases overall capital efficiency and potential returns for participants without necessarily requiring them to take on a higher degree of underlying market risk.
By contrast, achieving that exact same multi-use profile within traditional finance typically requires capital to sit idle across separate, disconnected intermediaries—such as specialized brokers, commercial banks, and dedicated custodians—each of which introduces incremental costs, administrative overhead, and operational friction.
Several distinct pillars of the decentralised finance ecosystem work together to make this alternative model vastly more efficient, according to Kendrick’s analysis. Decentralized lending platforms allow users to simultaneously earn passive yields and source necessary liquidity through overcollateralised loans. Liquid staking protocols allow digital assets to remain economically active and usable even while they are actively locked to secure proof-of-stake blockchain networks. Meanwhile, automated market makers and decentralised exchanges provide the continuous, deep liquidity required for frictionless trading.
Lending protocols stand as the central focus of this entire network of economic activity, Kendrick noted. Without them, the vital connections required to bridge multi-use financial activities across disparate blockchain applications simply would not exist, making the transition of institutional-grade real-world assets onto distributed ledgers all the more essential for the future of global finance.
