Visa simply dropped a roadmap for the way forward for finance, and it runs on programmable money.
In a complete new report, the funds big is stating to its community of over 15,000 monetary establishments that the $670 billion stablecoin lending market is now not simply an experiment in crypto. This market is the muse for the following era of global credit score markets.
With the GENIUS Act now establishing a regulatory framework for stablecoins within the US, Visa sees a gap to bridge conventional banking with blockchain-based lending protocols that function 24/7, routinely alter rates of interest based mostly on provide and demand, and settle transactions in minutes quite than days.
Numbers behind the revolution
The info Visa presents paints an image of speedy institutional adoption. In August 2025 alone, $51.7 billion in stablecoins had been borrowed throughout 427,000 loans from 81,000 lively debtors.
These aren’t small retail transactions, as the typical mortgage measurement has recovered to $121,000, suggesting institutional gamers are more and more comfy with programmable credit score markets.
Moreover, the focus tells its personal story. Two protocols, Aave and Compound, dominate the lending market with 89% of the lending quantity, whereas USDC and USDT account for over 98% of the stablecoin provide powering these markets.
Ethereum and Polygon preserve a roughly 85% market share, whereas newer chains like Base, Arbitrum, and Solana are gaining floor, accounting for 11% of mixed exercise.
Borrowing charges averaged 6.4% APR in August 2025, with lending yields at 5.1% APY. These charges sit remarkably near conventional credit score markets, particularly contemplating the 24/7 availability and prompt settlement that sensible contracts present.
Three pillars of banking’s blockchain future
Visa’s roadmap facilities on three transformative shifts that would reshape how banks take into consideration lending, collateral, and credit score evaluation.
The primary is the tokenized asset market, which has already grown from $5 billion in December 2023 to $12.7 billion at the moment.
McKinsey tasks the sector may attain $1 trillion to $4 trillion by 2030, however Visa sees a good larger prize by connecting the standard credit score market of over $40 trillion to programmable money rails.
BlackRock’s BUIDL Fund exemplifies this evolution, reaching $2.9 billion in tokenized Treasury holdings whereas serving as collateral throughout a number of lending protocols.
Franklin Templeton’s OnChain U.S. Authorities Money Fund provides one other $800 million, whereas MakerDAO now derives practically 30% of its $6.6 billion steadiness sheet from real-world belongings.
Company bonds, non-public credit score, and actual property may quickly function collateral in always-on global lending markets, creating new liquidity sources for belongings that historically sat idle between buying and selling classes.
The following pillar is crypto collateral. Early movers, similar to ether.fi, are already launching non-custodial bank cards that allow customers to borrow towards their crypto holdings whereas sustaining asset possession.
This addresses a vital challenge of accessing liquidity with out triggering capital positive aspects taxes or forfeiting upside publicity.
Actual-time collateral monitoring by means of sensible contracts allows automated margin calls and threat administration that conventional credit score amenities can’t match.
Banks and personal credit score funds may function liquidity suppliers to those applications, providing institutional capital by means of programmable protocols quite than bilateral credit score agreements.
The third pillar is on-chain id. The present overcollateralization mannequin, whereas safe, limits the market to debtors who already possess important belongings.
The following breakthrough entails creating on-chain id and credit score scoring techniques that analyze pockets transaction historical past, asset holdings, and protocol interactions to assemble credit score profiles.
Platforms like 3Jane, Windfall, and Credora are pioneering strategies to evaluate creditworthiness based mostly on verifiable on-chain habits, all whereas preserving privateness by means of the usage of zero-knowledge proofs.
This might finally allow protocols to supply undercollateralized and unsecured loans based mostly on repute and credit score historical past.
Alternatives and adjustments wanted
The shift from conventional lending to programmable credit score markets requires elementary adjustments in how monetary establishments assess and handle threat.
As a substitute of analyzing steadiness sheets and authorized agreements, banks should consider protocol safety audits, governance buildings, and the reliability of knowledge sources.
This doesn’t remove threat, however as an alternative transforms it. Counterparty threat could be managed by means of sensible contracts and automatic liquidation, however expertise threat turns into paramount.
Banks want new frameworks for understanding sensible contract vulnerabilities, governance token voting mechanisms, and oracle dependencies.
As well as, three case research in Visa’s report show how main protocols are already serving institutional wants past crypto buying and selling.
Morpho aggregates demand and liquidity throughout platforms, enabling customers on Coinbase to faucet into shared swimming pools that embrace deposits from Ledger pockets customers and institutional companions, similar to Société Générale.
Credit score Coop makes use of programmable lockboxes to allow revenue-based lending, with stablecoin-linked card issuer Rain borrowing over $175 million in USDC towards future receivables.
Huma Finance powers cross-border fee financing with a $500 million month-to-month transaction quantity, providing APYs of 10% or extra to lenders by means of speedy capital recycling.
These are manufacturing techniques that course of a whole lot of thousands and thousands of {dollars} in month-to-month quantity, whereas providing yields that conventional banking merchandise battle to match.
Visa’s message to its financial institution companions is that the infrastructure for programmable lending already exists, processes billions in month-to-month quantity, and gives aggressive charges with superior transparency and automation.
The regulatory framework is rising, institutional adoption is accelerating, and technical dangers are more and more properly understood.
Organizations that embrace this infrastructure at the moment place themselves to guide tomorrow’s global credit score markets. Those that wait could discover themselves competing towards always-on, algorithmically managed lending protocols that provide 24/7 service, prompt settlement, and clear pricing.
The query for conventional banks isn’t whether or not stablecoin-powered lending will reshape credit score markets, as the information suggests it already has.
The query is whether or not they’ll take part in defining that future or discover themselves disrupted by it.
