Stablecoins and DeFi are back in the spotlight after Standard Chartered outlined a case for decentralized finance to scale into a $2 trillion market by 2028, propelled by the explosive rise of stablecoins and a growing institutional embrace of Ethereum. In a note to clients, Geoff Kendrick, the bank’s head of FX and digital assets research, said the stablecoin boom in 2025 has done more than disrupt payments and savings—it has laid the groundwork for the next phase of on-chain finance.
Key Points
The update lands alongside fresh signals from the Ethereum Foundation, which launched an Institutional Use Case page this week to explain how core DeFi infrastructure can support traditional finance needs. Together, these developments suggest a tighter linkage between stablecoins and DeFi, with tokenized real-world assets at the center of the next leg.
Why Standard Chartered thinks stablecoins and DeFi are entering a new phase
Kendrick argues that the success of stablecoins in 2025 has triggered three “preconditions” for a sustained DeFi expansion:
- Awareness in developed markets has risen sharply, bringing more users, liquidity and scrutiny.
- Liquidity has migrated on-chain, improving depth for lending, borrowing and market-making.
- On-chain credit markets have expanded, enabling more complex financial activity.
By his estimates, this convergence between stablecoins and DeFi will ignite the tokenization of real-world assets (RWAs), a niche that could grow from roughly $35 billion today to $2 trillion by the end of 2028. That view is broadly consistent with projections cited by the Treasury Borrowing Advisory Committee, suggesting a complementary path between public- and private-sector forecasts.
“TradFi is turning to Ethereum, which dominates the DeFi space. Key DeFi protocols like Aave are going to be the winners. The future of finance is now,” Kendrick said.
The capital plumbing behind stablecoins and DeFi
A major pillar of the thesis is reserve composition. Kendrick expects the stablecoin market cap to climb from about $230 billion to $2 trillion by 2028. If that proves correct, he says issuers would likely need to hold about $1.6 trillion of U.S. Treasury bills as backing—roughly in line with planned new T-bill issuance across the period.
That has two implications for stablecoins and DeFi:
- It could create a persistent, market-based bid for short-term U.S. sovereign debt, potentially stabilizing the front end of the curve.
- It could accelerate on-chain treasury market rails, spurring institutional workflows that bridge custody, settlement and reporting across traditional and decentralized systems.
The concept dovetails with the rapid growth of tokenized U.S. Treasuries and funds, where on-chain wrappers provide 24/7 portability while underlying assets stay anchored in regulated custody regimes.
Ethereum’s institutional courtship gathers pace
Ethereum remains the dominant chain by total value locked and developer activity, and the Foundation’s new Institutional Use Case page is an overt pitch to traditional finance. The effort explains how core building blocks—settlement finality, programmable contracts, composable liquidity—can support enterprise-grade use cases.
For stablecoins and DeFi, this institutional bridge matters:
- Clearer documentation reduces onboarding friction for banks, asset managers and payment firms.
- Standardized patterns for KYC, whitelisting and permissioned liquidity pools can address compliance mandates.
- Visibility into audits, governance and risk parameters helps align internal controls with on-chain operations.
In that framing, Ethereum functions as connective tissue between legacy infrastructure and programmable finance, allowing institutions to pilot DeFi features in controlled environments before broad deployment.
What could power the next leg for stablecoins and DeFi
Analysts and builders point to several catalysts:
- Regulatory clarity: Clearer rules for stablecoin issuance and disclosure could catalyze large-scale corporate adoption.
- Tokenized RWAs: Broader issuance of tokenized T-bills, money market funds and credit products can anchor yields and liquidity on-chain.
- Payment flows: Faster, cheaper, programmable settlement via stablecoins can compress working-capital cycles for merchants and platforms.
- Enterprise pilots: Banks and fintechs launching permissioned liquidity pools and compliant lending rails can draw in institutional volume.
From a market-structure standpoint, deeper integration of stablecoins and DeFi could mean that familiar finance functions—repo-like lending, collateralized credit, tokenized funds—happen on programmable rails, with improved transparency and near-real-time settlement.
Risks that could slow the march
Even the most bullish outlook for stablecoins and DeFi comes with caveats:
- Policy and enforcement: Jurisdictional differences in stablecoin and securities treatment could fragment liquidity and slow adoption.
- Operational resilience: Smart contract exploits and oracle failures remain live risks without robust controls and audits.
- Counterparty concentration: Heavy reliance on a small set of issuers or custodians could introduce single points of failure.
- Data and privacy: Aligning on-chain transparency with institutional confidentiality requirements is nontrivial.
Institutional comfort will depend on mitigating these risks with audits, circuit breakers, real-time monitoring and tiered permissions for different classes of participants.
Market snapshot: where stablecoins and DeFi stand now
While precise figures move daily, stablecoin market capitalization has risen materially this year, with on-chain activity clustering around major dollar-pegged assets used for trading, remittances and DeFi collateral. DeFi’s total value locked also leans heavily toward Ethereum, with leading protocols like Aave, Maker and Lido functioning as core financial primitives.
Chart of the Day
- Stablecoin Market Cap (source: DefiLlama)
The chart highlights the steady climb in aggregate capitalization, illustrating why liquidity depth has improved for swaps and credit.
Industry reactions and early institutional signals
Market participants echoed a cautious optimism about stablecoins and DeFi:
- Builders welcomed the prospect of standardized institutional patterns on Ethereum, especially for permissioned pools serving KYC’d counterparties.
- Asset managers said tokenized T-bill products could gain traction if operational frictions—custody, reporting, NAV calculations—are streamlined.
- Risk teams stressed the need for conservative collateral rules, robust governance and formal verification to reduce tail risks.
For retail users, the migration of RWAs on-chain could eventually improve savings options and access to yield-bearing instruments, assuming compliance and consumer protections are clear.
What else to watch today
Beyond the stablecoins and DeFi outlook, here are notable storylines on the radar:
- New Bitcoin whales control roughly 45% of BTC realized cap—raising liquidity and distribution questions.
- Berkshire Hathaway’s “death cross” moment offers a macro read-through for crypto risk appetite.
- XRP nears a technical “death cross”; bulls watching for catalysts to preserve momentum.
- TRUMP token momentum into November: four factors shaping optimism.
- Post-FOMC: what crypto whales are buying after the latest rate cuts.
- SpaceX shifts $31 million in Bitcoin—investors assess what remains on Musk-linked balance sheets.
- Binance.US responds to Senator Murphy over allegations tied to presidential crypto claims.
Crypto equities pre-market overview
| Company | Close (Oct 29) | Pre-Market | Change |
|---|---|---|---|
| Strategy (MSTR) | $275.36 | $272.00 | -1.22% |
| Coinbase (COIN) | $348.61 | $345.40 | -0.92% |
| Galaxy Digital (GLXY) | $36.43 | $35.50 | -2.55% |
| MARA Holdings (MARA) | $18.88 | $18.56 | -1.69% |
| Riot Platforms (RIOT) | $22.17 | $21.90 | -1.22% |
| Core Scientific (CORZ) | $20.77 | $20.36 | -1.97% |
Traders will watch whether macro risk—yields, dollar moves and liquidity—amplifies or dampens crypto beta at the open.
Practical takeaways for teams evaluating stablecoins and DeFi
- Establish a governance framework: Define risk limits, counterparty tiers and collateral types for on-chain activity.
- Start with permissioned pilots: Use whitelisted pools and KYC’d participants to test operational flows before scaling.
- Standardize treasury rails: If using stablecoins, align with custodians, auditors and real-time reporting to meet compliance.
- Stress-test smart contracts: Adopt formal verification, bug bounties and monitoring to minimize technical risk.
- Educate stakeholders: Train legal, risk and finance teams on tokenization mechanics, valuation and disclosure.
These steps can help institutions approach stablecoins and DeFi methodically, balancing innovation with controls.
Outlook: from pilot to production
If Kendrick’s scenario plays out, stablecoins and DeFi could underpin a chunk of global financial plumbing by decade’s end. Ethereum’s institutional overtures, combined with tokenized RWAs and standardized compliance toolkits, aim to make on-chain rails fit for purpose at scale. Success will hinge on measured execution: robust audit trails, clear consumer protections and risk frameworks that satisfy regulators while preserving the advantages of programmable finance.
Conclusion
Standard Chartered’s thesis is straightforward: stablecoins and DeFi have moved from experiment to infrastructure. With liquidity, awareness and credit formation in place—and Ethereum acting as a bridge—the next several years could see tokenized real-world assets expand orders of magnitude. The opportunity is significant, but so is the responsibility to build resiliently and compliantly. Institutions that start with focused pilots, strong governance and transparent reporting will be best positioned if the $2 trillion horizon becomes reality.
FAQ’s
What did Standard Chartered predict about stablecoins and DeFi?
The bank expects stablecoins and DeFi to expand rapidly, with tokenized real‑world assets potentially reaching $2 trillion by 2028 as adoption and on‑chain liquidity grow.
Why is Ethereum central to institutional adoption of DeFi?
Ethereum dominates DeFi by total value locked and offers programmable, composable infrastructure. New institutional resources aim to ease onboarding for banks and asset managers.
What are tokenized real‑world assets (RWAs) and why do they matter?
RWAs are blockchain tokens representing traditional assets like T‑bills or funds. They can enable 24/7 settlement, transparent ownership and programmable finance—key drivers of the projected $2T expansion.
Article Source: Yahoo finance
