Visa Cracks Code on Zero-Default On-Chain Lending

Visa has quietly developed a successful on-chain lending model in collaboration with Credit Coop. The system, which integrates VisaNet's settlement data with blockchain-based smart contracts, has facilitated over $2.5 billion in cumulative settlement volume since 2023 without any defaults.

The 'Spigot' smart contract at the center of the system automates repayment and collateral management directly from settlement receivables. This results in faster settlement cycles and borrowing costs that have dropped by as much as 30% for participating programs.

Rain, a Visa Principal Member, has been the largest user of the facility since Credit Coop went live in August 2023, accounting for roughly $2 billion of the total volume. Visa's stablecoin empire is also growing rapidly, with over 160 live stablecoin-linked card programs operating on its network worldwide.