Visa is diving deeper into the blockchain world, revealing plans to build on-chain lending infrastructure to bridge traditional finance and decentralized finance (DeFi). This move signals a significant step towards integrating stablecoin-based lending and programmable credit markets into the mainstream financial system.
Building the Rails for Institutional On-Chain Lending
Visa’s latest report, titled “Stablecoins Beyond Payments: The Onchain Lending Opportunity,” outlines its strategy to establish the technological and regulatory groundwork for institutional on-chain lending. The company aims to create APIs, compliance systems, and data tools that enable banks, fintechs, and asset managers to securely connect to decentralized protocols, rather than directly issuing tokens or taking on lending risk.
This approach aligns with Visa‘s vision of powering the next generation of digital finance, fostering innovation and efficiency in global liquidity and credit markets.
From “DeFi” to “On-Chain Finance”: A Strategic Rebrand
Visa is strategically shifting from the term “DeFi” to “on-chain finance,” aiming to present decentralized technology in a way that resonates with regulators and institutional partners. On-chain finance, as Visa describes it, is a regulated, transparent, and programmable version of DeFi, designed to meet the stringent requirements of traditional financial institutions.
The Scale of Stablecoin-Based Lending
The company’s whitepaper reveals that the emerging “onchain finance” market has already issued more than $670 billion in stablecoin loans since 2020, with $51.7 billion recorded in August 2025 alone. Using stablecoins as the settlement layer, these systems enable instant, fiat-linked liquidity while providing transparency and programmable interest rates—all governed by algorithms rather than middlemen.
Building on Previous Blockchain Experiments
Visa’s foray into on-chain lending builds on previous experiments with blockchain-based payment solutions. In 2024, the company ran a pilot program using stablecoins to pre-fund cross-border settlement accounts, demonstrating how programmable assets could simplify treasury operations. This initiative paved the way for Visa’s current focus on developing robust on-chain credit infrastructure.
With stablecoin market capitalization surpassing $300 billion and lending protocols managing billions in on-chain assets, traditional finance players are increasingly viewing decentralized systems as viable liquidity sources. Visa’s entry could accelerate institutional participation and drive further innovation in the space.
Real-World Applications and Case Studies
To illustrate the model, Visa’s report highlights three examples where stablecoin-based credit is already functioning at scale. Morpho, a liquidity “meta-layer,” connects institutional wallets and exchanges like Coinbase, Ledger, and Bitpanda, allowing borrowers to post tokenized bitcoin as collateral for USDC loans. Credit Coop, which Visa directly partners with, uses smart contracts to split and redirect merchant receivables.
Visa’s Infrastructure-First Approach
Visa doesn’t plan to issue tokens or directly fund loans. Rather, it’s a technology play without exposure to counterparty lending risk. Instead, the payment network wants to own the rails: the APIs, analytics, and settlement systems that allow programmable credit to plug into the traditional financial world.
By positioning itself as the infrastructure provider rather than a market participant, Visa aims to serve as the bridge between traditional finance (TradFi) and decentralized finance (DeFi), envisioning a financial ecosystem where banks and asset managers can access blockchain liquidity through compliant and secure interfaces.
Future Outlook: Tokenization and Innovation
Looking ahead, Visa forecasts a decade of transformation in digital credit markets, with key trends including tokenized traditional assets becoming blockchain collateral to unlock multi-trillion-dollar lending pools, crypto-backed credit programs expanding, on-chain identity verification enabling under-collateralized lending at scale, and AI-driven risk models replacing legacy evaluations.
“As on-chain finance evolves to serve more traditional financial use cases, Visa is committed to helping our partners navigate this transformation and seize the opportunities it presents,” the company stated in the report.
What This Means for the Industry
Visa’s initiative could drive greater institutional adoption of DeFi, bringing new capital and expertise to the space. This influx of resources could accelerate the development of more sophisticated and scalable decentralized financial solutions. Industry experts believe that Visa’s entry into on-chain lending could be a game-changer for DeFi, legitimizing the space and paving the way for greater mainstream adoption.
Financial institutions and technology enthusiasts should closely monitor Visa’s progress and explore opportunities to engage with the evolving on-chain finance ecosystem. By staying informed and proactive, stakeholders can position themselves to capitalize on the transformative potential of decentralized finance.
