Visa’s Shift to Onchain Finance Infrastructure
Visa, the company that built the world’s largest payment network handling nearly $16 trillion in transactions, is now setting its sights on the lending side of decentralized finance. In a recent report titled “Stablecoins Beyond Payments: The Onchain Lending Opportunity,” the company has deliberately rebranded DeFi as “onchain finance” – a move that seems calculated to make decentralized credit more palatable to traditional financial institutions.
I think this represents a significant shift in how major financial players view blockchain-based lending. Rather than treating it as experimental technology, Visa appears to be positioning it as the next evolution of credit markets. The timing is interesting too, coming during discussions around the GENIUS Act and increasing institutional interest in blockchain applications.
The Scale of Onchain Lending
What’s particularly striking is the scale Visa highlights in its report. Since 2020, the onchain finance market has apparently issued more than $670 billion in stablecoin loans. That’s not small change by any measure. Lending activity reportedly reached new highs in mid-2025, which suggests this isn’t just theoretical – there’s real economic activity happening.
Visa argues that these numbers demonstrate stablecoins have evolved beyond their original use as trading instruments. They’re becoming the foundation for automated credit markets that operate continuously and settle instantly. That’s a pretty compelling value proposition when you think about traditional lending processes that can take days to complete.
Existing Models and Partnerships
The report points to three existing platforms that demonstrate how stablecoin-based lending is already working at scale. Morpho serves as a liquidity “meta-layer” connecting institutional players like Coinbase, Ledger, and Bitpanda. It allows borrowers to use tokenized bitcoin as collateral for USDC loans, which is interesting because it bridges different crypto asset classes.
Credit Coop, which Visa directly partners with, uses smart contracts to handle merchant receivables. Then there’s Huma Finance, which focuses on cross-border working-capital loans and automated supplier payments. These examples show that the infrastructure is already developing, with different players finding their niches.
Visa’s Strategy: Building the Rails
What’s most revealing about Visa’s approach is that they’re not planning to issue tokens or directly fund loans. Instead, they want to provide the underlying infrastructure – the APIs, analytics, and settlement systems that connect programmable credit to traditional finance. It’s a technology play rather than a lending play, which makes sense given their history and expertise.
This strategy mirrors what Visa did with card payments – they didn’t become a bank, they built the network that banks use. Now they’re applying the same logic to onchain finance. They want to be the trusted intermediary that makes institutional participation viable by handling data, compliance, and infrastructure.
It’s a clever positioning, really. They avoid direct exposure to lending risk while potentially capturing value from the entire ecosystem. If they can convince institutions with trillions in capital to participate through their rails, they could become as essential to onchain lending as they are to traditional payments.
But I wonder if the rebranding from DeFi to “onchain finance” will stick. The terminology might help with institutional adoption, but the underlying technology and principles remain largely the same. Still, it’s fascinating to watch a traditional financial giant try to shape the narrative around decentralized systems while building the infrastructure to connect them to the existing financial world.
