Visa Thinks Stablecoins Can Break Into the $40 Trillion Credit Market

Payments giant Visa thinks stablecoins could play a big role in the $40 trillion global credit market, the company said in a new report.

Visa’s new report doesn’t claim that on-chain lending will reach $40 trillion. Instead, it argues that stablecoin-based lending could open the door for traditional institutions to bring parts of the $40 trillion global credit market onto programmable, blockchain-based rails.

“For banks and financial institutions, this represents both an opportunity and an imperative to understand how programmable money is reshaping credit markets,” wrote the authors.

Stablecoins—which are crypto tokens typically pegged to assets like the U.S. dollar, and are widely used by traders to enter/exit trades and evade volatility—have already originated $670 billion worth of lending in the past five years, according to a new Visa study. The market currently consists of 1.1 million unique borrowers with an average loan size of $76,000.

But that number is on the rise. In August, the average loan size increased to $121,000, Visa said.

Circle’s USDC and Tether’s USDT account for 98% of current stablecoin borrowing, which mirrors their dominance in the circulating supply, the report said. At the time of writing, USDT accounts for $181 billion and USDC for $76 billion, or 83%, of the $307 billion stablecoin market cap.

Since the start of the year, the total market cap of stablecoins has gained $100 billion—helped along by the GENIUS Act, which created a regulatory framework for stablecoins issued by U.S. companies.

Users on Myriad, a prediction market owned by Decrypt parent company DASTAN, have slowly but steadily become more certain that the total stablecoin market capitalization will reach $360 billion within the first month of 2026. There’s now 67% of users predicting that stablecoins can close the roughly $53 billion gap before the end of January.

But the growing adoption of stablecoins has not come without detractors.

Just this morning, the International Monetary Fund wrote in its 2025 Global Financial Stability Report that stablecoin adoption offers alternatives to traditional safe assets and bank deposits, and could facilitate cross-border transactions.

“These trends raise the specter of excessive risk taking, rising leverage, and maturity mismatch vulnerabilities in the financial system,” the IMF said.

And the industry has taken a few stumbles. On Wednesday afternoon, industry onlookers noticed that stablecoin issuer Paxos minted and then immediately burned $300 trillion worth of the PayPal USD (PYUSD) stablecoin. Paxos is the payment processor’s official stablecoin partner, issuing and providing the infrastructure to manage its U.S. dollar-backed token.

After a couple hours of speculation, Paxos explained on X that it had “mistakenly minted” the funds, adding: “There is no security breach. Customer funds are safe. We have addressed the root cause.”