A new Visa report argues that stablecoins could reshape parts of the $40T global credit market. In the past five years, stablecoins have already originated $670B in on-chain loans across 1.1M unique borrowers, with USDT and USDC accounting for 98% of activity. We unpack the numbers, the mechanics, and the implications for banks—and what the path to a $360B stablecoin market by early 2026 might look like

A fresh report from Visa contends that stablecoins are moving beyond payments and into credit, with the potential to reshape portions of the roughly $40 trillion global credit market. The thesis: programmable, dollar-pegged assets can bring the speed, settlement finality, and transparency of blockchains to lending flows that have long been siloed in legacy rails. If accurate, that doesn’t just tweak how crypto works—it changes how banking works, too.

The Numbers Visa Put on the Table

$670 billion in cumulative lending has already been facilitated with stablecoins over the last five years, according to Visa’s analysis.
The market now counts around 1.1 million unique borrowers with an average loan size of ~$76,000; in August 2025 that average spiked to ~$121,000, a sign of deeper-ticket borrowers entering the pipe.
USDT + USDC make up ~98% of stablecoin borrowing activity, mirroring their dominance in circulating supply.
Monthly on-chain lending hit roughly $51.7B in August 2025, with ~81,000 active borrowers.

Context matters: these aren’t tiny, retail-only tickets. The rising average loan size implies institutional participation and the use of stablecoins as operational cash for trading, treasury, and collateral optimization—use cases that play to tokenized dollars’ strengths.

From Payments to Credit: Why Stablecoins Fit

Stablecoins excel where speed, predictability, and interoperability matter. In lending, that can mean instant collateral posting, near-real-time interest accrual, and transparent risk ledgers. Visa’s report frames a path where tokenized cash and tokenized collateral reduce friction across origination, servicing, and secondary markets—especially for short-dated, commodity-like credit exposures (e.g., overcollateralized loans, inventory financing, margin credit).

What Changes for Banks and Lenders

Liquidity and funding structure: If stablecoin balance grows on trading desks and treasuries, more wholesale funding could migrate on-chain, altering deposit dynamics over time. Policymakers are watching; the Bank of England, for instance, has floated caps on systemic stablecoin holdings to protect bank credit creation.
Risk plumbing becomes observable: Default, liquidation, and collateral health can be monitored on-chain, enabling programmatic covenants and faster remediation.
Interoperability with tokenized assets: Tokenized T-bills and money-market instruments plug into stablecoin-based credit, tightening the loop between cash and collateral. (Analysts at McKinsey and others have noted the accelerating link between tokenized cash and next-gen payments/credit.)

The 98% Question: Why USDT and USDC Dominate

Visa’s data lines up with broader market snapshots: USDT (~$181B) and USDC (~$76B) together account for roughly 83% of a ~$307B stablecoin market as of mid-October 2025, and about 98% of borrowing flows. Liquidity begets liquidity—issuers with the deepest fiat on/off ramps, robust attestation regimes, and wide exchange support tend to dominate credit usage, not just payments.

Has the Market Really Grown by $100B This Year?

Yes—multiple independent tallies show total stablecoin capitalization climbing from roughly $205–$210B at the start of 2025 to the $300–$310B range by October. Put simply, that’s on the order of a $100B+ expansion year-to-date—before any late-Q4 effect.

Can Stablecoins Hit $360B by January 2026?

That’s an aggressive but increasingly discussed waypoint. Some outlets cite prediction-market odds that stablecoin cap will reach about $360B by the first month of 2026, implying a ~$50–60B climb from current levels. It’s a path that would require either sustained issuance or a fast institutional onboarding cycle, but it’s not arithmetically outlandish given recent run-rates. Treat it as a scenario, not a guarantee.

Mechanics: How Stablecoin Credit Actually Works

Collateralized lending: Overcollateralized loans secured by liquid crypto assets or tokenized cash equivalents, with margin and liquidation rules enforced by smart contracts.
Credit lines to market makers and funds: Short-duration, revolving facilities that fund inventory, basis trades, and settlement—denominated and repaid in stablecoins for speed and interoperability.
Programmatic servicing: Interest accrues block by block; repayments, coupons, and refinancing can all clear on-chain with transparent ledgers.

Visa’s work also highlights that average borrowing APRs in the last year (to Aug 2025) trended near ~6.7%, broadly in line with parts of traditional credit—an important signal that on-chain borrowing is not just a “degen premium” product anymore.

Why This Could Reshape Parts of a $40T Market

Unit economics: Lower origination and servicing costs, faster settlement, and automated compliance can open previously uneconomic niches (smaller tickets, cross-border MSME credit).
Transparency as a feature: On-chain audit trails reduce informational asymmetry, potentially compressing risk premia for standardized products.
Composability: Tokenized collateral (T-bills, invoices, RWAs) plus programmable cash (stablecoins) create lego-like credit products that can be syndicated or securitized on-chain.

But There Are Real Frictions

Policy uncertainty: Central banks worry that large stablecoin balances could disintermediate deposits and constrain bank credit—hence talk of caps and resolution regimes for systemic issuers.
Forecast dispersion: Not every analyst is in the moonshot camp. Some houses now expect a ~$500B stablecoin market only by 2028, a far cry from trillion-dollar predictions—underscoring that mainstream adoption remains uneven.
Operational risk: Bridges, custody, key management, and issuer controls (including mint/burn privileges) are non-trivial; rare mishaps still happen and must be engineered around.

Investor and Builder Checklist

Track issuance and flows: DeFiLlama and other dashboards show circulating supply and net mints/burns; sustained issuance is the cleanest leading indicator.
Follow credit-specific metrics: Monthly on-chain lending volumes, active borrowers, average ticket size, and realized APRs (see Visa’s series and independent recaps).
Mind concentration: With USDT/USDC at ~98% of borrowing, venue and issuer risk are concentrated—diversify routes and counterparties where possible.
Watch policy timelines: UK/US/EU rulemaking (e.g., caps, resolution, reserve requirements) will shape how far stablecoins can encroach on deposit-funded lending.

The 2026 Setup: A Probabilistic Take

If stablecoin cap expands from roughly <$310B toward <$360B in early 2026, three signals would likely be present: (1) ongoing net issuance in USDT/USDC and rising adoption of institutional-grade rails, (2) credit volumes holding near the ~$50B/month handle with average tickets staying in six figures, and (3) regulatory clarity that removes onboarding friction for banks and corporates. Conversely, setbacks in policy (caps too tight) or high-profile operational incidents could slow that trajectory materially.

Bottom Line

Visa’s report reframes stablecoins as credit infrastructure, not just payment chips. With $670B in on-chain loans already originated, 1.1M borrowers, and two issuers powering ~98% of activity, the rails are maturing fast. Whether the sector reaches $360B by early 2026 or not, the direction is clear: programmable dollars are creeping into the core mechanics of lending. For banks, that means adapting to on-chain liquidity and transparency. For builders, it’s a green light to connect tokenized cash, collateral, and compliance into workflows the legacy system can’t match for speed or auditability.

Disclosures

This article is educational and not investment advice. Projections (including $360B by early 2026) are scenario-based and may not materialize. Always verify data via multiple independent sources and consider regulatory developments when evaluating stablecoin risk.