Visa is enhancing financing for stablecoin programs using blockchain data, surpassing $20 billion in settlement volume and securing $2.5 billion in 2023 alone.
Visa's Innovative Approach to Stablecoin Financing
Visa is leveraging blockchain technology and its extensive payment network to enhance financing options for stablecoin-related card programs. The company recently announced that it will allow lenders to utilize VisaNet settlement data alongside blockchain transaction information to better assess the performance of payment businesses and tailor financing solutions.
As a testament to the growth in this space, Visa's stablecoin settlement volume has reached an impressive annualized rate exceeding $20 billion. This increase is supported by a financing initiative with Credit Coop, which has successfully facilitated over $2.5 billion in settlement volume since the beginning of 2023.
According to Rubail Birwadker, Visa’s global head of growth products and partnerships, the combination of reliable payment data and blockchain technology can create new liquidity opportunities. He emphasized that this approach allows businesses to access capital transparently and in a way that keeps pace with today’s commerce demands.
Visa's analytics indicate that onchain lending protocols have enabled more than $694 billion in stablecoin loans since 2020. Within its own network, the volume of transactions for stablecoin-linked card programs has surged nearly 200% year-over-year, reflecting the growing adoption of these digital assets.
In its previous announcements, Visa highlighted the potential of stablecoin lending to integrate with the $40 trillion global credit market. The company also launched a stablecoin platform for banks and fintechs, which combines various functionalities such as issuance and treasury services with its payment solutions.
The collaboration with Credit Coop exemplifies Visa's new financing model. Credit Coop utilizes smart contracts to offer working capital and settlement financing, automating processes such as funding and collateral management. This partnership integrates Visa's settlement data to assess credit performance, with loans backed by settlement receivables expected from payment businesses.
Since the model's inception, it has reported zero defaults among participants, although details on the lenders involved and specific financing rates remain undisclosed. Furthermore, Visa has expanded its stablecoin payment services, adding five new blockchains to its settlement program, which now encompasses nine blockchains and previously reported a $7 billion annualized settlement rate.
