Traditional payment infrastructure has just connected directly with on-chain liquidity. Visa announced Tuesday that lenders can now use VisaNet settlement data alongside blockchain records to assess business performance and determine financing terms.
The lending market outside conventional banking systems has expanded significantly. According to data from Visa’s analytics dashboard, on-chain lending protocols have processed over $694 billion in stablecoin loans since 2020. For Visa itself, payment volume across more than 160 stablecoin-linked card programs recorded year-over-year growth of nearly 200%.
Zero-Default Test
The concept of merging two distinct networks was directly tested in the field. Visa partnered with Credit Coop as an early example of implementing this new financing model. Credit Coop provides working capital and settlement financing using smart contracts to automate funding, collateral management, and payment processes.
Records from these initial operations show solid numbers. The joint financing model with Credit Coop has facilitated over $2.5 billion in cumulative settlement volume since 2023, with a zero default rate. This credit milestone aligns with the growth of stablecoin transactions across Visa’s network, where its stablecoin settlement volume surged more than 15-fold to an annualized run rate exceeding $20 billion.
Targeting the $40 Trillion Credit Market
Visa’s expansion of Web3 support tools has continued throughout the year. In April, the company added five new blockchains - Arc, Base, Canton, Polygon, and Tempo - to its settlement program. The addition brought the total number of supported blockchains to nine, with an annualized settlement rate reaching $7 billion at the time of the April announcement.
Three months later, the infrastructure stack became even more comprehensive. In July, Visa launched a dedicated stablecoin platform for banks and fintech companies that combines token issuance, digital wallets, transfer routing, and corporate treasury management into a single hub.
Visa’s Global Head of Growth Products and Partnerships, Rubail Birwadker, stated that stablecoins are transforming how money moves and creating opportunities to redesign the infrastructure behind payments. This view aligns with Visa’s thesis last October, when it projected that stablecoin lending could bring a portion of the $40 trillion global credit market onto blockchains. With the hybrid credit reporting system now live, the gateway for institutional capital has opened wider.
Reported by Decrypt.
Also read: What Is DeFi (Decentralized Finance)?
Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
