A new Visa report has unveiled staggering growth in on-chain lending powered by stablecoins, revealing that over $670 billion worth of loans have been facilitated through blockchain-based lending protocols over the past five years. The findings highlight how stablecoins like USDT, USDC, and DAI have quietly become the backbone of decentralized finance (DeFi) and a major liquidity source in global crypto markets.
Stablecoins Drive Explosive Growth in On-Chain Lending
According to the Visa Digital Asset Insights Report, stablecoins have played a pivotal role in the rise of on-chain credit markets, enabling users to borrow and lend crypto assets without intermediaries. From DeFi platforms like Aave, Compound, and MakerDAO to cross-chain lending solutions, stablecoins have provided the price stability needed for large-scale, automated financial activity.
The report notes that between 2019 and 2024, the value of loans issued using stablecoins increased by over 900%, cementing their role as the primary liquidity asset for both retail and institutional participants.
USDT and USDC Lead, While DAI Gains Institutional Ground
The report highlights that Tether (USDT) and USD Coin (USDC) account for nearly 80% of all lending volume, serving as collateral, loan assets, and settlement currencies across DeFi protocols. Meanwhile, DAI, the algorithmic stablecoin issued by MakerDAO, has seen rising adoption among institutional DeFi users, particularly following the introduction of real-world asset (RWA) collateral in 2023.
Visa’s analysis shows that stablecoin-powered lending has generated consistent annualized yields between 4% and 12%, depending on market cycles and platform liquidity.
Institutional DeFi Lending on the Rise
The report also emphasizes growing institutional participation in on-chain lending, with entities like Maple Finance, Centrifuge, and Clearpool offering regulated DeFi credit pools for asset managers and fintech firms.
Stablecoins are being used not just for crypto-native loans but also for tokenized treasury operations, cross-border trade finance, and RWA lending, further legitimizing their use within the broader digital asset ecosystem.
Stablecoin Lending’s Role in Market Resilience
The $670 billion milestone also underscores how on-chain lending markets have withstood extreme volatility, including the Terra-LUNA collapse in 2022 and subsequent crypto winter. Stablecoins provided liquidity and a flight-to-safety mechanism for DeFi participants during downturns, helping maintain protocol solvency and user confidence.
Visa’s researchers noted that the resilience of stablecoin lending contrasts with the failures of centralized crypto lenders like Celsius, BlockFi, and Voyager, which collapsed due to poor risk management.
Policy and Regulatory Outlook
As stablecoin usage in credit markets expands, regulators are taking a closer look. The U.S. Treasury, European Union, and Monetary Authority of Singapore have all proposed frameworks to govern stablecoin issuance and collateral management.
Visa’s report predicts that “regulated stablecoins” will dominate future on-chain lending, bridging traditional finance (TradFi) and DeFi through programmable compliance and interoperable token standards.
The company also hinted that its blockchain division is developing analytics tools for tracking stablecoin flows in DeFi, signaling its growing involvement in crypto market infrastructure.
The Bigger Picture: Stablecoins as a New Credit Standard
The findings highlight a key shift: stablecoins are evolving from trading instruments into credit primitives that enable programmable, transparent lending on a global scale.
Analysts believe that the next phase of this growth will come from tokenized treasuries, corporate on-chain financing, and AI-powered credit risk analysis using blockchain data.
With Visa, Mastercard, and several major banks now experimenting with stablecoin settlement systems, the report confirms what many in the industry already know: stablecoins have become the new rails of decentralized credit.
The Bigger Picture: Stablecoins as a New Credit Standard
The findings highlight a key shift: stablecoins are evolving from trading instruments into credit primitives that enable programmable, transparent lending on a global scale.
Analysts believe that the next phase of this growth will come from tokenized treasuries, corporate on-chain financing, and AI-powered credit risk analysis using blockchain data.
With Visa, Mastercard, and several major banks now experimenting with stablecoin settlement systems, the report confirms what many in the industry already know: stablecoins have become the new rails of decentralized credit.
FAQs
Q1: What did Visa’s report reveal about stablecoins?
Visa found that stablecoins enabled $670 billion in on-chain lending over the past five years, highlighting their growing role in decentralized finance.
Q2: Which stablecoins are most used in lending?
USDT, USDC, and DAI dominate the market, accounting for nearly 80% of total lending volume across DeFi protocols.
Q3: Why are stablecoins crucial for DeFi lending?
Their price stability and liquidity make them ideal for collateral and loan settlements, reducing volatility risks.
Q4: How are institutions using stablecoins in lending?
Through regulated DeFi platforms like Maple and Centrifuge, institutions use stablecoins for credit pools and tokenized asset lending.
Q5: What’s next for stablecoin lending?
Expect growth in regulated stablecoin frameworks, tokenized real-world assets, and AI-integrated credit analytics on blockchain networks.
