Visa Connects Settlement Data to Blockchain Lenders for Stablecoin Cards
Visa has announced a significant development in its stablecoin-linked card program, sharing settlement data with blockchain-based lenders to facilitate access to working capital through on-chain credit infrastructure. This move aims to support the rapid expansion of stablecoin-linked cards, which have seen a nearly 200% year-over-year growth in payment volume.
According to Visa, more than 160 stablecoin-linked card programs operate on its network, with the company's stablecoin settlement volume surpassing a $20 billion annualized run rate, up over 15 times year over year. This growth is a testament to the increasing adoption of stablecoins in the digital payment space.
Visa has been piloting this model with Credit Coop, a firm that provides working capital and settlement financing for stablecoin-linked card programs through smart contracts that automate funding, collateral management, and repayment. The pilot has supported over $2.5 billion in cumulative financed settlement volume since 2023, with no defaults across participating facilities.
Chris Walker, founder and CEO of Credit Coop, highlighted the significance of combining Visa settlement data with on-chain transaction records, stating, "Payment companies have always had good collateral in their settlement receivables, but no way to show lenders how it performs in real time." This collaboration enables lenders to evaluate live performance, enforce repayment from the settlement flow, and extend capital on-chain from participating lenders as a program grows.
Stablecoin-Linked Cards in Rapid Expansion
Cuy Sheffield, head of crypto at Visa, noted that stablecoin-linked cards are in a period of rapid expansion, with new issuers joining the network every week. This growth is attributed in part to the passage of the GENIUS Act, which established U.S. stablecoin regulation, a "huge" turning point according to Sheffield.
Visa's announcement builds on its broader stablecoin push, which includes the launch of its stablecoin platform in July. This platform enables stablecoin settlement and aims to help financial institutions access digital asset capabilities. The company has also been reshaping its business, eliminating roughly 2,600 jobs, or about 7% of its workforce, with cuts falling on technology and product teams.
Chief Executive Officer Ryan McInerney stated that freed-up capital would be reinvested in areas including stablecoin, cross-border, and business-to-business products. Visa stock has gained roughly 7% this year, reflecting the company's efforts to adapt to the evolving digital payment landscape.
On-Chain Lending Protocols Facilitate Stablecoin-Denominated Loans
Visa noted that since 2020, on-chain lending protocols have facilitated more than $694 billion in stablecoin-denominated loans. However, this activity has largely stayed within crypto markets rather than flowing to everyday payment businesses. The company believes that combining trusted payment data with blockchain lending infrastructure can make it easier for lenders to evaluate financing opportunities for fast-growing digital payment companies that lack the operating history typically required by traditional lenders.
This development has significant implications for the digital payment space, as it enables lenders to access reliable data on payment performance and make more informed financing decisions. It also highlights the growing importance of stablecoins in the digital payment ecosystem.
What to Watch Next
As Visa continues to expand its stablecoin-linked card program, it will be interesting to see how this development impacts the broader digital payment landscape. The company's efforts to combine trusted payment data with blockchain lending infrastructure may pave the way for more innovative financing solutions in the future.
Additionally, the growth of stablecoin-linked cards and the increasing adoption of stablecoins in the digital payment space will be worth monitoring. As the regulatory environment continues to evolve, it will be essential to track the impact of these developments on the digital payment ecosystem.
Visa's announcement marks a significant step forward in the integration of blockchain technology and traditional payment systems. As the company continues to innovate and adapt to the evolving digital payment landscape, it will be exciting to see the impact of these developments on the industry as a whole.