Standard Chartered's digital assets research team expects the total value of tokenized assets on blockchain to hit $4 trillion by the end of 2028. Stablecoins and real-world assets (RWA) would each account for roughly half of that pool, according to a new report from the bank's global head of digital assets research, Geoff Kendrick.
The composability advantage
Kendrick argues that composability gives leading DeFi protocols a structural edge that traditional finance can't replicate. In practice, that means a single on-chain position can earn yield, serve as collateral, and remain tradable all at once. Off-chain, those same functions require separate intermediaries and layers of legal paperwork. Standard Chartered estimates that this configuration meaningfully lowers the effective cost of capital compared to conventional finance.
BlackRock's BUIDL fund is cited as a working example. The tokenized Treasury product holds about $2.7 billion in assets, earns roughly 4% yield, backs stablecoins, and is already used as collateral on Aave. That combination of uses within one token is something traditional Treasury holdings can't easily match.
Three revenue drivers for protocols
The report identifies three factors that will drive protocol revenue: more assets moving on-chain, a higher share of those assets deposited into DeFi, and a higher share of those deposits being borrowed against. Circle's USDC stablecoin illustrates the trend—its market cap and the portion lent across DeFi venues are both rising together.
Protocols with conservative risk metrics and professional governance are expected to capture most of the inflows. Established platforms with proven risk frameworks should take the bulk of the upside, while newer or less audited protocols carry sharper drawdown risk when operating at institutional scale.
CLARITY Act as the next trigger
The CLARITY Act is flagged as the next major catalyst for institutional migration into lending rails. Polymarket traders currently price the bill's passage in 2026 at around 64%. If passed, the legislation could clear regulatory fog and open the door for larger institutions to park funds in on-chain lending venues.
A huge gap between on-chain and off-chain
Standard Chartered estimates that about 1,000 times more value sits off-chain than on-chain today. That gap represents the scale of potential migration if tokenization gains mainstream adoption. But the transition won't happen overnight.
The next real test will be whether large institutional treasurers start parking tokenized funds inside open lending venues at meaningful scale. Until that happens, the $4 trillion forecast remains a projection—not a guarantee.
