Visa simply dropped a roadmap for the way forward for finance, and it runs on programmable cash.

In a complete new report, the funds large 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 inspiration for the subsequent technology of worldwide 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 relatively than days.

Numbers behind the revolution

The information Visa presents paints an image of fast institutional adoption. In August 2025 alone, $51.7 billion in stablecoins have been borrowed throughout 427,000 loans from 81,000 lively debtors.

These aren’t small retail transactions, as the typical mortgage dimension has recovered to $121,000, suggesting institutional gamers are more and more snug 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 keep 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 immediate 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 right this moment.

McKinsey tasks the sector may attain $1 trillion to $4 trillion by 2030, however Visa sees a fair larger prize by connecting the normal credit score market of over $40 trillion to programmable cash 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 Cash Fund provides one other $800 million, whereas MakerDAO now derives almost 30% of its $6.6 billion stability sheet from real-world belongings.

Company bonds, personal credit score, and actual property may quickly function collateral in always-on world lending markets, creating new liquidity sources for belongings that historically sat idle between buying and selling classes.

The subsequent pillar is crypto collateral. Early movers, reminiscent of 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 crucial problem of accessing liquidity with out triggering capital good points taxes or forfeiting upside publicity.

Actual-time collateral monitoring via sensible contracts allows automated margin calls and threat administration that conventional credit score amenities can not match.

Banks and personal credit score funds may function liquidity suppliers to those packages, providing institutional capital via programmable protocols relatively than bilateral credit score agreements.

The third pillar is on-chain identification. The present overcollateralization mannequin, whereas safe, limits the market to debtors who already possess vital belongings.

The subsequent breakthrough includes growing on-chain identification and credit score scoring programs 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 conduct, all whereas preserving privateness via using zero-knowledge proofs.

This might ultimately 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 basic adjustments in how monetary establishments assess and handle threat.

As a substitute of analyzing stability sheets and authorized agreements, banks should consider protocol safety audits, governance constructions, and the reliability of knowledge sources.

This doesn’t eradicate threat, however as a substitute transforms it. Counterparty threat could be managed via 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 reveal 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, reminiscent of 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 via fast capital recycling.

These are manufacturing programs that course of a whole lot of thousands and thousands of {dollars} in month-to-month quantity, whereas providing yields that conventional banking merchandise wrestle 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 affords aggressive charges with superior transparency and automation.

The regulatory framework is rising, institutional adoption is accelerating, and technical dangers are more and more nicely understood.

Organizations that embrace this infrastructure right this moment place themselves to guide tomorrow’s world credit score markets. Those that wait might discover themselves competing towards always-on, algorithmically managed lending protocols that supply 24/7 service, immediate 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.