Tokenization Market to Surge 5,600% to $2 Trillion by 2028: Standard Chartered Report

The global tokenization market is poised for explosive growth, with Standard Chartered (SC) forecasting a 5,600% expansion to reach $2 trillion by 2028. This projection, detailed in a recent report by DL News, highlights a fundamental shift in how assets are managed and traded on blockchain networks. Geoffrey Kendrick, Head of Digital Assets Research at SC, explains that a tokenized market places all assets and infrastructure on a single ledger, enabling frictionless interaction and unlocking new capital efficiencies.

Standard Chartered Tokenization Forecast: Key Drivers and Market Size

The Standard Chartered tokenization forecast identifies lending protocols as the central hub for this activity. The report emphasizes that the expansion of stablecoin-based DeFi lending is a primary catalyst. By moving real-world assets (RWAs) on-chain, a single asset can simultaneously serve as collateral, generate yield, and provide liquidity. This trinity of functions dramatically lowers capital costs compared to traditional finance, where such operations are siloed and inefficient.

To understand the scale, consider the current market. As of early 2025, the total value locked in tokenized RWAs is estimated at roughly $35 billion. A jump to $2 trillion represents a 57-fold increase in just three years. This growth trajectory is driven by institutional adoption, regulatory clarity in key jurisdictions, and technological improvements in blockchain scalability.

DeFi Lending Growth and Real-World Asset Tokenization

The surge in DeFi lending growth is intrinsically linked to real-world asset tokenization. Traditional lending markets are valued in the hundreds of trillions of dollars. Tokenization allows assets like real estate, corporate bonds, and commodities to be fractionalized and traded 24/7 on decentralized protocols. This creates a more liquid and accessible market.

Key benefits of RWA tokenization include:

• Increased Liquidity: Illiquid assets like real estate can be traded in smaller fractions.
• Reduced Costs: Automation and elimination of intermediaries lower transaction fees.
• Programmable Compliance: Smart contracts enforce regulatory rules automatically.
• Global Access: Investors worldwide can participate without traditional barriers.

Standard Chartered’s analysis points to lending protocols as the epicenter of this activity. These protocols use stablecoins as a medium of exchange, allowing borrowers to post tokenized RWAs as collateral. This creates a virtuous cycle: more assets are tokenized, more liquidity is provided, and more lending occurs.

Expert Analysis: The Role of Stablecoins

Stablecoins, particularly those pegged to the US dollar, serve as the bridge between traditional finance and DeFi. They provide a stable unit of account and a medium of exchange within the tokenized ecosystem. As the report notes, the expansion of stablecoin supply is a direct enabler of DeFi lending growth. Without stablecoins, the frictionless movement of value across different tokenized assets would be impossible.

Risks and Resilience: Lessons from the KelpDAO Exploit and Aave Outflows

The report does not ignore the risks. It specifically addresses the KelpDAO exploit and the large outflows from Aave earlier this month. These incidents, described as some of the most serious recent events in DeFi, involved sophisticated attacks on smart contracts and liquidity pools.

Key takeaways from these incidents include:

• Smart Contract Risk: Vulnerabilities in code remain the primary attack vector.
• Liquidity Fragility: Large outflows can destabilize protocols temporarily.
• Market Resilience: Despite these shocks, the fundamental growth drivers for tokenization remain intact.

Standard Chartered’s conclusion is that these events, while serious, do not derail the long-term thesis. The market is maturing, and security measures are improving. The report argues that the efficiency gains from tokenization outweigh the current risks, especially as institutional-grade custody and insurance solutions become more common.

Conclusion

The tokenization market is on an undeniable growth path. Standard Chartered’s forecast of $2 trillion by 2028 underscores the transformative potential of blockchain technology in finance. While risks like the KelpDAO exploit and Aave outflows highlight the need for robust security, the fundamental drivers—lower capital costs, increased liquidity, and global accessibility—remain strong. As regulatory frameworks solidify and technology matures, tokenization is set to become a cornerstone of the global financial system.

FAQs

Q1: What is the tokenization market?
The tokenization market refers to the ecosystem where real-world assets (like real estate, bonds, or commodities) are represented as digital tokens on a blockchain. This allows for fractional ownership, 24/7 trading, and automated compliance.

Q2: How did Standard Chartered arrive at the $2 trillion forecast?
Standard Chartered based its forecast on the projected growth of stablecoin-based DeFi lending and the increasing tokenization of real-world assets. They modeled the adoption curve based on current institutional interest, regulatory developments, and technological advancements.

Q3: What are the main risks to the tokenization market?
Key risks include smart contract vulnerabilities (as seen in the KelpDAO exploit), regulatory uncertainty in some jurisdictions, and liquidity shocks from large outflows (like those from Aave). However, the report notes that these risks are being actively addressed by the industry.

Q4: How does DeFi lending drive tokenization growth?
DeFi lending protocols allow tokenized assets to be used as collateral to borrow stablecoins. This creates a use case for tokenization, as it unlocks liquidity from traditionally illiquid assets. The efficiency gains over traditional finance are a major growth driver.

Q5: Will tokenization replace traditional finance?
No, tokenization is more likely to complement and integrate with traditional finance. It offers efficiencies in settlement, liquidity, and access, but traditional finance provides stability, regulation, and trust. The two systems are expected to converge over time.