Visa is positioning stablecoin-powered programmable money as the foundational layer for the next generation of global credit markets, urging its vast network of over 15,000 financial institutions to embrace this transformative shift. With new regulatory frameworks emerging, the payments giant sees an unprecedented opportunity to bridge traditional banking with blockchain-based lending protocols, unlocking efficiencies and new financial products that operate 24/7 with instant settlement.
The New Frontier of Global Credit
Visa's comprehensive report highlights a rapidly maturing stablecoin lending market, which has moved beyond experimental stages to become a significant financial force. Data from August 2025 alone reveals $51.7 billion borrowed across 427,000 loans, with an average loan size of $121,000, underscoring robust institutional engagement. Leading protocols like Aave and Compound, along with stablecoins such as USDC and USDT, dominate this landscape. Critically, borrowing and lending rates in this decentralized finance (DeFi) space closely mirror traditional credit markets, yet offer the distinct advantages of continuous availability and near-instant transaction settlement.
Visa's Three Pillars for Financial Transformation
Visa's roadmap for integrating programmable money into traditional finance rests on three core pillars designed to revolutionize lending, collateral, and credit assessment. First, the tokenized asset market is expanding rapidly, projected to grow significantly by 2030, connecting the massive $40 trillion traditional credit market to blockchain rails. Examples like BlackRock's BUIDL Fund demonstrate how tokenized real-world assets can serve as collateral in always-on lending markets, creating new liquidity. Second, crypto collateral enables non-custodial borrowing against digital assets, allowing users to access liquidity without triggering capital gains taxes or losing upside exposure. Real-time smart contract monitoring ensures automated risk management, with banks poised to become liquidity providers. Third, on-chain identity aims to move beyond overcollateralization. By analyzing wallet transaction histories and protocol interactions, new platforms are pioneering privacy-preserving credit scoring systems that could eventually facilitate undercollateralized or unsecured loans based on reputation and verifiable on-chain behavior.
Navigating the Future: Opportunities and Imperatives
Embracing this new paradigm requires a fundamental shift in risk management for financial institutions. Instead of solely scrutinizing balance sheets, banks must now evaluate protocol security, governance structures, and data source reliability. This redefines risk, shifting focus from counterparty risk (managed by smart contracts) to technology risk. Visa's report showcases successful institutional use cases, such as Morpho aggregating liquidity for diverse users, Credit Coop enabling revenue-based lending, and Huma Finance powering cross-border payment financing with high-yield opportunities. Visa's message is clear: the infrastructure for programmable lending is robust, processes billions monthly, and offers competitive rates with superior transparency and automation. For traditional banks, the critical question isn't if stablecoin-powered lending will reshape credit markets, but whether they will actively participate in shaping this future or risk disruption from agile, algorithmically managed lending protocols.
