HeraldLoop

Standard Chartered — page 8

Organization · 153 articles
Share

Coverage, page 8

page 8 of 8

Tokenisation will balloon to $2tn despite DeFi turbulence, Standard Chartered says

Tokenisation will balloon some 5,600% to be a $2 trillion market by 2028, according to Standard Chartered. At the heart of the forecast is continued expansion in decentralised finance lending via stablecoins, which the British bank views as rails enabling real-world assets such as stocks, bonds, commodities, and other funds to migrate onchain. “All assets and infrastructure exist on the same ledger and can therefore interact without barriers,” Geoffrey Kendrick, global head of digital assets research at Standard Chartered, wrote in a note shared with DL News . Kendrick’s bullish call comes amid major turbulence in the DeFi space that has shaken investors’ onchain confidence. DeFi rebound Earlier in April, a nearly $300 million exploit of the Ethereum liquid restaking protocol KelpDAO triggered a bank run on the decentralised lending platform Aave. Aave lost $17 billion in deposits and $5.5 billion in active loans as panic spread, in what Kendrick calls “one of the most severe DeFi shocks in recent memory.” But rather than fracturing, the DeFi community coordinated. A coalition of DeFi protocols and companies raised more than $300 million to stabilise the system and restore backing ratios. While the hack exposed vulnerabilities and dented confidence, Kendrick argues it does not derail the core growth engine of tokenisation. Rapid industry stabilisation efforts and structural upgrades reinforce the long-term case for DeFi banking and stablecoin liquidity — the twin pillars supporting a projected $2 trillion real world asset market by 2028. Onchain banking boom Kendrick said he expects a DeFi banking bonanza. Lending in DeFi lowers the cost of capital because everything is built on “composability” and works more seamlessly than in traditional finance. In simple terms, one asset can do several jobs at once. It can earn returns, be used as collateral for a loan, and still stay available to trade. This can increase overall returns without taking on more risk, according to the report. In traditional finance, achieving that same multi-use profile requires capital to sit across separate intermediaries such as brokers, banks, and custodians, increasing cost and friction. Several parts of DeFi make this far more efficient, according to Kendrick. Lending platforms let users earn returns and take out loans. Liquid staking allows assets to stay usable even while they are staked. Decentralised exchanges provide the liquidity needed for trading. “Lending protocols are the central focus of this activity,” Kendrick said. “Without them, there would be no connection across multi-use activities.” Lance Datskoluo is DL News’ Europe-based markets correspondent. Got a tip? Email him at lance@dlnews.com

DLNewsDLNews•Lance Datskoluo30 Apr

Banks are fighting a ‘sideshow’ as Clarity Act stalls. Will it matter?

The Clarity Act is stalling in Washington — but industry insiders say the outcome has already been decided. Zachary Townsend, CEO of crypto insurance company Meanwhile, says that traditional banks lobbying to block yield-bearing stablecoins are “fighting a sideshow.” “Every incumbent fights a better financial product,” Townsend said . “Stalling the Clarity Act doesn't change where this ends. “They lobby, they delay, but they lose the market anyway.” Townsend’s optimistic take comes as the Senate Banking Committee failed to schedule an April markup of the Clarity Act, pushing debate into May as three sticking points remain: decentralisation provisions, securing Republican votes, and stablecoin yield. The delay comes even as President Donald Trump told memecoin holders at Mar-a-Lago over the weekend that he wants the bill passed and would sign it immediately. “The banks are fighting a sideshow while the real deposit displacement is already underway,” Townsend said. What’s the issue? At the heart of the standoff lies stablecoin interest. The Genius Act, signed into law by Trump in July 2025, requires stablecoin issuers to maintain one-to-one reserves backing outstanding tokens. Those reserves can include US dollars, federal reserve notes, insured deposits, short-term Treasuries and money market funds. Crucially, the law prohibits issuers from offering direct interest or yield to stablecoin holders. It does not explicitly block affiliates or third parties from structuring yield products around them. Some versions of the proposed Clarity Act would close that gap entirely. Banking groups argue that allowing stablecoins to offer competitive returns could drain deposits from traditional bank accounts. Because stablecoin reserves are fully backed rather than fractionally lent, critics warn this could shrink lending capacity. But a White House economic analysis published earlier in April paints a different picture. Using a baseline model , eliminating stablecoin yield increases bank lending by just $2.1 billion — roughly 0.02% of total lending — while imposing a net welfare cost of $800 million. Large banks account for 76% of the modest lending bump, with community banks contributing about $500 million, or a 0.026% increase in their lending. Even under stacked “worst-case” assumptions — including stablecoins growing sixfold as a share of deposits and reserves locked entirely in non-lendable cash — the model produces a 4.4% increase in aggregate bank loans. Community bank lending rises by 6.7% in that extreme scenario. Townsend sees the debate as symbolic. In his view, deposit migration is structural. In January, Standard Chartered forecasted that banks could lose up to $1.5 trillion in deposits to stablecoins by 2028 regardless of yield rules. Runway ending The legislative calendar is tightening. Republican Senator Thom Tillis has requested more time to consult banks on the yield issue and release draft text. If it is not passed before the midterm elections in November, it could be delayed for years, according to Alex Thorn, head of research at Galaxy Digital. “If the markup slips past mid-May, the probability of enactment in 2026 will drop sharply,” Thorn warned in a note shared with DL News . “In our view, the odds of Clarity being signed into law in 2026 are roughly 50-50, and possibly lower.” Polymarket punters give the Clarity Act a 47% chance of being passed in 2026, down from 82% in February. Lance Datskoluo is DL News’ Europe-based markets correspondent. Got a tip? Email him at lance@dlnews.com

DLNewsDLNews•Lance Datskoluo27 Apr