A recent report from Visa reveals that stablecoins have expanded their role far beyond simple trading and payments, now underpinning more than $670 billion in loans issued via on-chain lending platforms over the past five years.
According to Visa’s data, monthly lending volumes on blockchain platforms reached $51.7 billion as of August 2025. This activity involves over 81,000 active borrowers, with an average loan amount estimated at $76,000. Lending rates between September 2024 and August 2025 hovered around 6.7%, which aligns closely with traditional credit market benchmarks.
The study highlights the growing interest from banks and financial institutions in leveraging blockchain technology to enhance the efficiency and speed of lending processes. Stablecoins — digital assets pegged to fiat currencies — are increasingly being tapped not only for payments and trading but also as a foundation for modern lending and capital markets.
Currently, the stablecoin market is valued at approximately $307 billion. The top two stablecoins, Circle’s USDC (with a market capitalization of $76 billion) and Tether’s USDT (valued at $181 billion), constitute more than 98% of all stablecoin-based lending activities, Visa’s report notes.
In terms of blockchain ecosystems, Ethereum and Polygon dominate the lending landscape, accounting for 85% of on-chain loan volumes in August 2025. Other networks such as Base, Arbitrum, and Solana together represent about 11% of the market share.
Regarding protocol usage, the decentralized lending platforms Aave and Compound remain the leaders. Aave holds a total value locked (TVL) of $40 billion, while Compound’s TVL stands at $2.6 billion. Combined, they generate approximately 89% of the sector’s lending volume.
Visa emphasizes the unique position of stablecoins at the crossroads of payments, lending, and capital markets. The report suggests that stablecoins have the potential to not only improve existing payment infrastructures but also drive significant innovation in the automation and modernization of lending and financial services worldwide.
Several specialized platforms have emerged as prominent players within institutional stablecoin lending. Morpho, with a TVL exceeding $7 billion, facilitates over $1.7 billion in loans monthly. Meanwhile, Huma Finance handles roughly $500 million in cross-border lending transactions. Other notable names include Credit Coop, which has attracted partnerships with companies such as Coinbase and Société Générale.
The growth of stablecoin lending has been bolstered by regulatory clarity in the United States. The passage of the GENIUS Act earlier this year established the first federal framework for issuing and supporting stablecoins. This legislation offers banks and fintech companies a regulated path to legally launch and operate stablecoin projects, fostering increased institutional participation.
As the intersection between traditional finance and blockchain technology deepens, Visa’s report illustrates how stablecoins are becoming a vital vehicle for on-chain lending activity, signaling a significant shift in how credit markets may evolve in the near future.
