Tokenized real world assets (RWA) could reach $2 trillion cumulatively over the next three years as more global capital and payments move to more efficient blockchain rails, according to investment bank Standard Chartered.
The bank said in a Thursday report shared with Cointelegraph that the “trustless” structure of decentralized finance (DeFi) is poised to challenge the dominance of traditional finance (TradFi) systems controlled by centralized organizations.
Investment banks predict that non-stablecoin tokenized RWA could reach a market capitalization of $2 trillion by 2028 due to the growing use of DeFi in payments and investments.
Of the $2 trillion, $750 billion is expected to flow into money market funds, another $750 billion into tokenized US equities, $250 billion into tokenized US funds, and another $250 billion into “illiquid” segments of private equity, including commodities, corporate bonds, and tokenized real estate.
Related: $19 billion market crash paves the way for Bitcoin’s rise to $200,000: Standard Chartered
“Stablecoin liquidity and DeFi banking are key prerequisites for the rapid expansion of tokenized RWA,” said Jeff Kendrick, Global Head of Digital Asset Research at Standard Chartered, adding:
“We expect RWA to increase rapidly over the next few years.”
A $2 trillion market cap would mean RWA would grow more than 57 times over the next three years from its current cumulative value of $35 billion, according to RWA.xyz data.
Source: RWA.xyz
Related: Thaler’s strategy hinted at inclusion in the S&P 500 after Q3 earnings: 10X Research
Stablecoin that facilitates DeFi’s self-sustaining growth cycle
The total supply of stablecoins reached a new record of over $300 billion on October 3, marking a year-to-date growth rate of 46.8%.
Kendrick said the expansion of stablecoins is strengthening the broader DeFi ecosystem. “In DeFi, liquidity creates new products, and new products create new liquidity,” he wrote. “We believe that a self-sustaining cycle of DeFi growth has begun.”
Despite the optimism, Standard Chartered said regulatory uncertainty remains the biggest threat to the RWA sector. The report warned that progress could stall if the Trump administration fails to introduce a comprehensive cryptocurrency bill by the 2026 midterm elections.
magazine: Bitcoin suffers if it fails to capture gold, XRP bulls return to fight: trade secrets
