Visa uses onchain lending to finance stablecoin card programs
Money MovesVisa pairs settlement data with Credit Coop's smart-contract credit to fund daily card settlement
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Overview
Updated 1 hour agoVisa's stablecoin-linked card programs grew payment volume nearly 200% year over year, and their settlement run rate just passed $20 billion at an annualized pace. Those programs must fund daily settlement obligations before cardholders repay them, a working-capital gap that bank credit lines were too slow and too rigid to fill.
Visa now pairs its settlement data with Credit Coop's onchain lending infrastructure. Lenders underwrite against live settlement receivables, and a smart contract called the Spigot enforces repayment from incoming proceeds. Credit Coop has financed $2.5 billion since 2023 with zero defaults.
Why it matters
Stablecoin card programs now have a working-capital path that traditional bank credit couldn't serve, changing who can launch a card issuer.
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People Involved
Organizations Involved
Operates VisaNet, the settlement system feeding daily data to Credit Coop's lending facilities.
Provides stablecoin-denominated revolving credit facilities secured by settlement receivables.
Visa Principal Member focused on stablecoin-linked card partnerships.
US-issued premium Visa credit card for global travelers, operating under Rain's bank identification number.
Timeline
August 2023 September 2026
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Visa unveils onchain lending for stablecoin card programs
Today AnnouncementVisa combines VisaNet settlement data with Credit Coop's smart-contract lending, citing $2.5B financed with zero defaults since 2023.
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Visa stablecoin settlement tops $20B run rate
MilestoneStablecoin settlement hits a $20B annualized run rate, up more than 15x year over year, per industry reporting.
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Karta announces $140M raise
FundingKarta raises $15M in Series A and a $125M institutional credit facility after scaling on Credit Coop financing.
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Rain begins using Credit Coop's settlement facility
PartnershipRain, a Visa Principal Member, starts funding daily Visa settlement obligations through Credit Coop's onchain credit facility.
Historical Context
3 moments from history that rhyme with this story — and how they unfolded.
First credit card securitization (1986)
Bank One (Delaware) issued the first credit-card-backed securities, packaging card receivables into bonds investors could buy. That turned card loans from a balance-sheet cost into a fundable asset class.
Banks gained a cheap, scalable source of capital for card issuance, fueling the credit card boom of the late 1980s and 1990s.
Receivables-backed finance became the backbone of consumer lending, with card securitizations now measured in hundreds of billions of dollars annually.
Visa's model applies the same insight to stablecoin card programs: settlement receivables are reliable collateral. Onchain data and smart contracts replace the opaque underwriting that once limited receivables financing.
Merchant cash advance boom (2004-2015)
Funders advanced working capital to small merchants against future card sales, charging effective rates often far above bank loans. Underwriting was opaque and repayment was manual, so pricing reflected the lender's uncertainty rather than the merchant's real payment history.
The industry grew into a multi-billion-dollar market but earned a reputation for high costs and aggressive collection.
It showed that receivables-based lending works at scale, but that data opacity keeps it expensive.
Visa's settlement-data pipeline gives lenders a live, borrower-independent view of performance. Participating programs have seen borrowing costs fall by as much as 30%.
Lockbox banking and deposit account control agreements (1970s-2000s)
Banks collected borrower payments into lockboxes on behalf of lenders, and secured lenders signed deposit account control agreements (DACAs) giving them legal control over collateral accounts. Manual sweeps and banking-hours limits constrained how fast cash could move.
Collateral control became a legal and operational pillar of secured lending, with lenders relying on third-party banks to enforce it.
The structure persisted for decades, with no settlement capability from Friday afternoon through Monday morning on many facilities.
Credit Coop's Spigot smart contract is the onchain analog of a lockbox under a DACA, enforced programmatically rather than through manual sweeps, and it never closes.
