With new U.S. stablecoin rules in place, Visa says banks are starting to explore blockchain-based lending markets.
Stablecoins are expanding beyond payments and trading, according to a new report from Visa, which found that more than $670 billion in loans have been issued through on-chain lending platforms over the past five years.
Visa said monthly on-chain lending volumes reached $51.7 billion in August 2025, with over 81,000 active borrowers and an average loan size of $76,000. The average borrowing rate from September 2024 to August 2025 was about 6.7%, similar to traditional credit markets.
The report highlights that stablecoins are no longer just used for trading or payments. They are now playing a larger role in lending, as banks and financial firms explore how blockchain can speed up and improve the efficiency of borrowing and lending.
The total stablecoin market is now valued at about $307 billion, and the two largest stablecoins, Circle’s USDC ($76 billion market cap) and Tether’s USDT ($181 billion market cap), make up more than 98% of all stablecoin lending activity, according to Visa.
Across blockchains, most lending occurred on Ethereum and Polygon (85% of the market in August 2025), while Base, Arbitrum, and Solana made up just 11%. Regarding on-chain protocol lending, Aave, which has a total value locked (TVL) of $40 billion, and Compound, which has a TVL of $2.6 billion, accounted for 89% of lending volume.
“What makes stablecoins unique is their position at the intersection of three massive markets: payments, lending and capital markets,” the report reads. “While clear opportunities exist for stablecoins within the existing payments ecosystem, they are uniquely positioned to drive even greater transformation in the global modernization and automation of lending and capital markets.”
The report also highlighted platforms like Morpho, Huma Finance, and Credit Coop as leading examples of stablecoin lending networks used by institutions such as Coinbase, Société Générale, and Visa partners.
Morpho, which has a TVL of over $7 billion, alone facilitates over $1.7 billion in monthly loans, while Huma Finance handles about $500 million in cross-border lending, Visa said.
Stablecoin lending is growing as U.S. regulators continue to clarify the rules around digital dollars. The GENIUS Act, passed earlier this year, established the first federal framework for issuing and backing stablecoins, giving banks and fintechs a clear path to launch them legally.
