Decentralized finance is positioned to become a core layer of infrastructure for tokenized financial markets as trillions of dollars worth of assets move onto blockchain rails over the next few years, according to analysts at Standard Chartered. In a research report published Monday, Geoffrey Kendrick, the bank's global head of digital assets research, estimated that tokenized assets on public blockchains could reach $4 trillion by the end of 2028.

Market Context

The projection arrives as institutional interest in blockchain-based financial products continues to accelerate. Traditional finance has begun testing onchain settlement and custody solutions, while crypto markets experienced broader turbulence Monday following geopolitical tensions that sent Bitcoin down 2.4% to $76,500 and Ether dropping 3.5% to $2,116.

Analysis

Kendrick's report centers on the concept of "composability"—a feature of blockchain-based markets where assets, exchanges, lending systems and settlement rails operate on the same shared ledger. This technical architecture allows a tokenized asset to serve several functions simultaneously: earning yield, backing a loan and remaining tradable without requiring separate bilateral integrations or traditional intermediaries.

Traditional finance still relies on separate custodians, settlement networks and collateral management systems that often create delays and additional costs, according to the report. DeFi protocols, by contrast, operate as native infrastructure for tokenized assets—potentially offering more efficient alternatives for trading, lending and collateral management.

The bank projects the $4 trillion in tokenized assets will be evenly split between stablecoins and tokenized real-world assets such as bonds and funds. BlackRock's (BLK) tokenized Treasury fund BUIDL, issued by Securitize through its CEPT platform, serves as an early example of how these products are already integrating with DeFi applications—generating yield while serving as collateral across lending protocols.

Regulatory clarity could accelerate institutional adoption. The CLARITY Act, which advanced out of the Senate Banking Committee last week, was cited as a potential catalyst for bringing more assets onchain if passed into law later this year.

The report acknowledges risks from crypto exploits—the recent Drift and KelpDAO hacks drained nearly $600 million in digital assets combined. However, Kendrick argued that larger protocols are becoming more resilient through security audits, insurance mechanisms and professionalized governance structures.

"Well-established DeFi protocols appear to be in a strong position to build the institutional links required to scale up," Kendrick wrote.

Key Numbers

- $4 trillion: Projected tokenized assets on public blockchains by end of 2028 per Standard Chartered

- 50%: Expected share split between stablecoins and tokenized real-world assets (RWAs)

- $600 million: Approximate value drained in combined Drift and KelpDAO exploits

- $76,500: Bitcoin price at time of report (down 2.4%)

- $112: Brent crude briefly topping this level per barrel amid geopolitical tensions

What to Watch

Watch for CLARITY Act legislative progress through the Senate as a key regulatory catalyst for institutional DeFi adoption. Monitor BlackRock's BUIDL fund growth and its expansion across lending protocols as a bellwether for traditional finance integration. Security developments at major DeFi protocols will remain critical—audits, insurance coverage and governance improvements could differentiate protocol resilience as asset volumes scale toward the projected trillions in tokenized value.