Standard Chartered Bank, a major British financial institution, has announced a forecast that total assets locked in the decentralized finance (DeFi) sector will reach $2.7 trillion (approximately 400 trillion yen) by 2030.The analysis indicates that the main drivers of this growth will be “tokenization”—the digitization of real-world assets on the blockchain—and “crypto-native growth” based on cryptocurrencies. DeFi is a system that provides financial services without intermediaries such as banks, and it has been gaining attention in recent years due to its transparency and efficiency.This forecast suggests that DeFi is not merely a niche technology but has the potential to expand dramatically in scale over the next few years as it integrates with the traditional financial system. In particular, the ongoing tokenization of traditional assets such as real estate and bonds is expected to lead to new investment opportunities and improved liquidity.However, the DeFi market is still in its early stages, and regulatory frameworks and technical challenges remain. In this article, we will explain the details of this forecast and the impact that DeFi and tokenization will have on the future of finance from an expert’s perspective.
Overview of Standard Chartered’s Forecast
Standard Chartered, a major British financial institution, has released new forecasts regarding the future of the decentralized finance (DeFi) market.
According to the bank’s analysis, the total value of assets locked in DeFi is expected to reach $2.7 trillion by 2030. Source
This significant growth will be driven primarily by two factors: “tokenization” and “crypto-native growth.”
Tokenization refers to the technology of digitizing real-world assets on the blockchain.
On the other hand, crypto-native growth refers to the expansion of new services and ecosystems based on cryptocurrency technologies and concepts.
This forecast suggests that DeFi is likely to continue playing a significant role in financial markets.
However, continued caution is needed regarding market volatility and changes in the regulatory environment.
What Is DeFi? Its Current State
DeFi (Decentralized Finance) is a system that utilizes blockchain technology to provide financial services without the intermediation of traditional financial institutions such as banks.
Specifically, lending, DEXs (decentralized exchanges), and stablecoins are among the major DeFi services.
The total value of assets deposited in DeFi protocols is referred to as TVL (Total Value Locked) and serves as a key indicator of the market’s size.
The current DeFi market operates on multiple blockchains, including Ethereum.
Its transparency and automated execution via smart contracts offer advantages not found in traditional financial systems.
However, vulnerabilities in smart contracts and security risks also exist, so careful judgment is required when using these services.
What Is Tokenization-Driven Growth?
Tokenization is the process of representing real-world assets—such as real estate, bonds, and stocks—as digital securities (tokens) on a blockchain.
This allows even assets that previously had low liquidity to be divided into smaller units and traded.
For example, it becomes possible to purchase a portion of a high-value real estate property as a token.
Furthermore, thanks to the characteristics of blockchain, tokenized assets offer greater transparency and efficiency in trading.
Cross-border transactions also become easier, and this is expected to open the door to new investor groups.
Standard Chartered Bank believes that this tokenization will significantly boost the growth of the DeFi market.
The Significance of Crypto-Native Growth
Crypto-native growth refers to new value and services that arise directly from the technology and concepts of crypto assets themselves.
This goes beyond simply digitizing existing financial products and refers to innovative applications unique to blockchain.
For example, this includes the creation of new economic ecosystems utilizing NFTs (non-fungible tokens: digital data with unique value).
Another example is project management through DAOs (Decentralized Autonomous Organizations: a form of organizational management without a specific administrator).
These technologies enable more flexible and open economic activities that were difficult to achieve within the traditional financial system.
Standard Chartered has analyzed that such crypto-native innovations are essential for the expansion of DeFi.
Background and Challenges of the .7 Trillion Forecast
The $2.7 trillion forecast is based on the outlook that the DeFi market will continue to maintain a high growth rate.
In particular, the entry of institutional investors into the DeFi market is considered one of the factors accelerating this growth.
However, the DeFi market still faces many challenges.
For example, these include delays in regulatory frameworks by national authorities and the strengthening of anti-money laundering (AML) measures.
Additionally, technical security risks and the complexity of user interfaces could pose barriers to widespread adoption.
Overcoming these challenges and enhancing reliability will be key to achieving these projections.
Potential Impact on the Financial Industry
Advances in DeFi and tokenization have the potential to significantly impact the existing financial industry.
By adopting DeFi technology, traditional financial institutions may gain opportunities to build new business models.
For example, they could use blockchain to streamline securities settlement or offer new digital assets.
On the other hand, it has been pointed out that DeFi could partially replace the roles of existing financial institutions.
This is expected to lead to cost reductions in financial services and expanded access to financial services for a wider range of people.
However, discussions regarding financial system stability and consumer protection are also essential.
Outlook for the Japanese Market
In Japan as well, interest in DeFi and tokenization is growing.
The Financial Services Agency is moving forward with the development of regulations regarding crypto assets and blockchain technology.
In particular, a legal framework is being established in the field of security tokens (digital securities: securities issued on a blockchain).
However, compared to the global DeFi market, the Japanese market is still in its early stages of development.
To promote the adoption of DeFi services domestically, it will be necessary to foster user understanding and provide more user-friendly services.
Furthermore, harmonizing with international regulatory trends will be a key challenge moving forward.
[Source: Original Article]
Related Articles
* We are the official distributor of RedotPay in Japan.