On-chain lending markets reached a new peak of $18.7 billion on November 7, and Visa views this as just the beginning. The payments giant released an October report projecting that on-chain lending could reach $40 trillion in the coming years, representing a potential 2100x increase from current levels.
The projection rested on one core thesis: stablecoins serve as the funding backbone for programmable credit markets that can tap traditional finance. Visa’s framework positioned stablecoins as settlement rails rather than just payment tools. The report noted that lenders deposit USDC or USDT into smart contract pools. Borrowers post collateral, represented via crypto or tokenized real-world assets (RWA). Smart contracts automate interest calculations, monitor collateral values in real-time, and trigger liquidations when necessary.
An Already Existing Model
The model already existed in production. Maple Finance operates institutional credit pools, funded primarily by USDC, with on-chain transparency and structured risk management. Figure Markets uses its Provenance blockchain to tokenize home equity loans and other receivables, settling them with stablecoin-style instant finality. Huma Finance offers payment financing for cross-border transactions and supplier payouts, enabling businesses to access stablecoin credit lines secured by receivables.
These platforms demonstrated the technical viability of on-chain lending. Visa’s contribution was reframing their architecture as a template for banks, asset managers, and card networks under a regulated stablecoin regime. The report assumed compliance-ready stablecoins and RWA platforms that fit existing AML and securities frameworks, particularly after the GENIUS Act created a U.S. regulatory framework for stablecoins.
On-chain lending has processed over $670 billion in cumulative stablecoin-denominated loans since 2020, per data from blockchain analytics firm Allium. Monthly volumes reached $51.7 billion in August 2025. Active loan balances averaged $14.8 billion, with Aave and Compound accounting for 89% of the August volume. The activity concentrated on the Ethereum, Polygon, Base, Arbitrum, and Solana blockchains.
Tapping More RWA Sectors
Visa’s $40 trillion projection tied on-chain lending to real-world asset tokenization. The RWA market has grown from $5 billion in December 2023 to $12.7 billion as of the current date. BlackRock’s BUIDL Fund held $2.9 billion in tokenized Treasuries, while Franklin Templeton’s BENJI fund added $800 million in tokenized government securities. These tokenized assets could serve as collateral in stablecoin lending markets, creating liquidity for traditional assets in 24/7 global credit pools.
Indirectly, the report addressed the common critique that only stablecoins work among tokenized assets. The answer was straightforward: if stablecoins are effective, they provide sufficient infrastructure to matter. Stablecoins provide fiat-denominated stability and programmability. Traditional assets, such as corporate bonds, private credit, and real estate, can serve as collateral in these markets. The settlement layer typically uses USDC or USDT rather than bank wires.
Critics who dismissed blockchain as a solution searching for a problem faced a counterargument: $18.7 billion in active loans, $670 billion in cumulative volume, and major institutions building products. Rain Card used Credit Coop’s smart contracts to finance cardholder receivables. Coinflow financed instant merchant disbursements through on-chain credit pools.
Efficiency At All Times
On-chain lending borrowed rates averaged 6.4% APR in August, while lending rates averaged 5.1% APY. These aligned closely with broader traditional market rates for comparable collateral quality. The efficiency stemmed from automated margining and 24/7 settlement, rather than interest rate manipulation. Visa positioned on-chain lending as infrastructure for regulated institutions rather than DeFi speculation.
The payment network offered end-to-end consulting for banks exploring stablecoin strategies, including market analysis, custody development, and on-chain finance integration. The pitch was clear in stating that platforms like Maple and Figure have proven the model works at a scale of hundreds of millions, but regulated stablecoins could scale it to trillions.
Whether on-chain lending reaches $40 trillion depends on regulatory clarity, institutional adoption, and the expansion of tokenized collateral pools. But at $18.7 billion and climbing, the market moved past theoretical debates into operational reality.