Crypto's $1 Trillion Yield Opportunity in LSTs and Tokenized RWAs Amid India's 6.5% GDP Growth Outlook

According to a report by Standard Chartered Bank, the tokenized RWA market-excluding stablecoins-is projected to surge from $35 billion in 2025 to $2 trillion by 2028, a 5,600% increase. This growth is driven by Ethereum's dominance in tokenization, with money market funds and listed equities expected to dominate the market, each reaching $750 billion by 2028. Meanwhile, LSTs, which represent staked crypto assets as tradable tokens, are gaining traction as institutional investors seek liquidity without sacrificing yield. These instruments are not merely speculative-they are foundational to a new financial infrastructure that bridges decentralized and traditional markets.

India's 6.5% GDP Growth and Blockchain Leadership

India's economic trajectory is a critical catalyst for this opportunity. With a GDP growth rate of 6.5%, the country is emerging as a global hub for blockchain innovation. Data from Chainalysis and market research reports indicate that India leads in blockchain adoption across retail, DeFi, and institutional activity. The nation's blockchain market, valued at $656.99 million in 2024, is projected to balloon to $61.5 billion by 2033, fueled by a 65.6% CAGR. This growth is underpinned by government initiatives such as NITI Aayog's National Strategy on Blockchain and MeitY's Vishvasya-Blockchain Technology Stack, which are accelerating blockchain-as-a-service and cross-industry integration.

India's institutional activity in blockchain is equally compelling. Despite regulatory challenges, including heavy taxation and unclear guidelines, institutional and retail investors are pivoting to offshore exchanges and derivatives trading. The Asia-Pacific region's on-chain transaction volume reached $2.36 trillion in 2025, with India playing a pivotal role. This resilience underscores the country's potential to become a global leader in tokenized finance.

Case Studies: Tokenization and GDP Synergy

India's tokenization efforts are already yielding tangible results. Maharashtra, the country's commercial capital, is spearheading a $566 billion tokenization initiative to digitize real-world assets such as real estate, enabling faster, transparent transactions. The Reserve Bank of India (RBI) has also launched pilot projects for tokenized Certificates of Deposit (CDs) and is exploring tokenization for wholesale CBDC settlements. These initiatives are unlocking liquidity in traditionally illiquid markets, with fractional ownership and digital fractionalization enabling broader access to capital.

The impact on GDP is profound. Maharashtra's chief minister has set a target of transforming the state into a $1 trillion economy by 2030, with tokenization as a cornerstone. Meanwhile, India's active dematerialized (DMAT) accounts have surged from 40 million in 2020 to nearly 200 million in 2025, reflecting a digital-first shift in financial participation. This infrastructure is not only democratizing access but also enhancing capital efficiency, a critical driver of GDP growth.

Institutional-Grade Yields: Bridging Macro and Micro

The convergence of India's GDP growth and blockchain innovation is creating a fertile ground for institutional-grade yields. Tokenized RWAs, such as real estate and money market funds, offer high liquidity and diversification, while LSTs provide exposure to staking rewards without locking up capital. For instance, India's mutual fund assets market is being reshaped by tokenization and digital distribution channels. This aligns with global trends, where stablecoins-tokenized representations of fiat-facilitated $18.4 trillion in transactions in 2024.

Moreover, India's digital infrastructure is maturing rapidly. Over 910 million card-on-file tokens and 3.2 billion transactions in 2024 highlight the nation's readiness for blockchain-driven finance. As financial institutions and fintechs tokenize assets, India is poised to see improved capital allocation and economic activity, directly contributing to its GDP growth.

Challenges and the Path Forward

While the outlook is optimistic, challenges remain. India's regulatory environment is still evolving, with heavy taxation and unclear guidelines deterring some institutional participation. However, the government's proactive stance-through initiatives like the Open Network for Digital Commerce (ONDC) and NFT-based land records-signals a commitment to fostering innovation. Additionally, international partnerships, such as Japan's collaboration on semiconductors and AI, are further bolstering India's growth trajectory.

Conclusion

The $1 trillion yield opportunity in LSTs and tokenized RWAs is not a distant vision but an unfolding reality, particularly in India. The country's 6.5% GDP growth, coupled with its blockchain leadership and institutional-grade infrastructure, is creating a virtuous cycle of innovation and economic expansion. For investors, this represents a unique window to capitalize on macroeconomic tailwinds and technological disruption. As India's tokenization initiatives gain momentum, the alignment of GDP growth and blockchain innovation will likely redefine the future of finance.