Visa’s stablecoin settlement activity has exceeded an annualised rate of $20bn, more than 15 times higher than it was a year ago, as the rapid expansion of crypto-linked card programmes forces issuers, lenders and banks to reconsider how settlement is financed.
More than 160 stablecoin-linked card programmes were active globally during Visa’s fiscal second quarter, while payment volumes generated by those programmes increased by almost 200% year on year.
The figures suggest Visa’s stablecoin operation is developing beyond an experimental service and becoming an alternative payments rail. The key change, however, is not simply the growth in the number or use of crypto cards. It is the emergence of a different model for funding the settlement obligations behind them.
Card programmes must meet their daily settlement commitments before cardholders repay the money they have spent. Larger issuers generally cover that timing gap through warehouse credit lines or securitisation.
Many newer stablecoin card programmes, by contrast, require only a few million dollars at a time. They also settle transactions seven days a week, creating a continuous funding requirement that does not fit easily with traditional lending arrangements.
Conventional credit facilities can be too costly and too slow to put in place for smaller businesses that need to draw down and repay capital every day. Visa said some crypto-linked card companies are consequently being held back not by a lack of demand, but by limited access to working capital suited to an always-on settlement cycle.
To address that gap, Credit Coop has worked with Visa to develop a revolving credit facility denominated in stablecoins.
The platform uses a smart contract called Spigot to direct settlement receivables and manage repayments automatically. It is intended to carry out a function similar to the lockbox used by conventional lenders, although the process is handled through code.
More than 9,000 repayments have been completed onchain across the platform. Credit Coop also receives authorised Visa settlement files directly, enabling lenders to compare data from the card network with the repayment records held onchain.
The company said greater confidence among lenders in the structure has helped reduce borrowing costs for participating programmes by as much as 30%.
Rain, a Visa Principal Member, is the clearest example of the model’s use so far. It has relied on Credit Coop to finance its daily settlement requirements since August 2023.
Credit Coop said it has financed more than $2.5bn in cumulative volume across its platform and processed more than 3,000 borrowing events and 9,000 repayments, without recording a default.
Karta subsequently used the same arrangement while building its credit history. It later secured a $125m institutional credit facility as part of a wider $140m financing package, a progression that could be significant for banks and other lenders assessing the sector.
The growth of stablecoin-linked cards is therefore doing more than expanding crypto payments. It is also producing a new category of receivables-backed credit that can be tracked and serviced in real time.
For Visa, the $20bn annualised run rate indicates that stablecoins are becoming more deeply embedded in mainstream payment infrastructure. The next major constraint on growth may not be consumer adoption, but whether the financing layer supporting settlement can expand quickly enough to match demand.
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