Standard Chartered: DeFi Is Set to Become the Backbone of a $4 Trillion Tokenized Economy.

For years, the worlds of traditional finance and decentralized finance have felt like parallel universes. But according to a new report from Standard Chartered, that’s about to change. The global bank’s analysts predict that DeFi is on the verge of becoming the core infrastructure for tomorrow’s tokenized markets, as trillions in real-world assets move onto blockchain rails.

In a research note released Monday, Geoffrey Kendrick, the bank’s head of digital assets research, laid out a striking forecast: by the end of 2028, tokenized assets on public blockchains could hit $4 trillion. That pile of value would be split roughly evenly between stablecoins and tokenized real world assets (RWAs), such as government bonds and investment funds.

So, as these assets go onchain, where will they actually live, trade, and grow? Not on traditional finance’s legacy systems, Kendrick argues. Instead, they’ll increasingly lean on DeFi protocols for core functions like trading, lending, and managing collateral.

Why? The magic word is "composability." In a blockchain based market, assets, exchanges, lending systems, and settlement ledgers all operate on the same shared digital record. That means one single tokenized asset can do three things at once: earn a yield, serve as collateral for a loan, and be traded elsewhere all simultaneously. In traditional finance, those jobs are split between separate intermediaries—custodians, settlement agents, collateral managers which creates delays and extra costs.

Kendrick points to BlackRock’s tokenized Treasury fund, BUIDL, as a perfect early example. Issued by tokenization specialist Securitize, the fund can generate Treasury yield, act as collateral, and plug into other lending protocols without needing countless one off deals.

Of course, regulation matters. Kendrick notes that the CLARITY Act—which recently advanced past the Senate Banking Committee could be a game changer. If passed into law later this year, it would give institutional investors a much clearer path to move assets onchain.

What does this mean for crypto investors? More assets and activity onchain should eventually boost the value of DeFi protocol tokens. “More assets moving on chain is likely to mean more throughput on DeFi protocols, supporting protocol token prices,” Kendrick wrote.

Yes, DeFi has its scars. Recent hacks at Drift and KelpDAO drained nearly $600 million in total, denting confidence. But the report argues that larger, well established protocols are getting tougher thanks to regular audits, insurance mechanisms, and more professional governance.

In short, Standard Chartered sees a future where the backbone of finance isn’t a Wall Street data center, but a public blockchain running open source DeFi code.