Visa Says Tether’s USDT and Other Stablecoins Could Shift Parts of $40 Trillion Credit Market to Blockchain Rails

• Stablecoins could enable institutional credit on programmable rails

• Visa reports $670 billion of stablecoin-originated lending in the past five years and growing adoption of USDC and USDT.

• Key risks noted by the IMF include rising leverage, maturity mismatch, and potential for excessive risk taking; Paxos recently reported a PYUSD minting error.

Stablecoins reshape the $40 trillion credit market: read Visa’s findings, IMF cautions, and market data — COINOTAG offers analysis and next steps.

By COINOTAG | Published: 2025-10-16 | Updated: 2025-10-16

What role could stablecoins play in the $40 trillion credit market?

Stablecoins could reshape the credit market by enabling parts of the existing $40 trillion global credit ecosystem to run on programmable, blockchain-based rails. Visa’s report argues that stablecoin-based lending already supports sizeable volumes and could lower friction for cross‑border credit while requiring new risk management and regulatory frameworks.

How large is stablecoin-based lending today and which tokens dominate?

According to Visa’s study, stablecoins have originated approximately $670 billion of lending over the past five years, involving about 1.1 million unique borrowers with an average loan size of $76,000 historically. In August the reported average loan size rose to $121,000. Circle’s USDC and Tether’s USDT account for roughly 98% of stablecoin borrowing activity, reflecting their dominant share of circulating supply: USDT near $181 billion and USDC near $76 billion of a roughly $307 billion total stablecoin market cap. Since the start of the year the stablecoin market cap rose by about $100 billion, aided in part by the GENIUS Act’s regulatory framework for U.S. issuers (plain text reference).

Frequently Asked Questions

How much lending has originated from stablecoins in the past five years?

Visa reports roughly $670 billion in stablecoin-originated lending over the past five years, spanning about 1.1 million unique borrowers. Average loan sizes have increased recently, with August data showing average loans of about $121,000.

Are stablecoins a systemic risk to the global financial system?

Stablecoins introduce new avenues for funding and cross-border payments but also raise risks. The IMF’s 2025 Global Financial Stability Report warns that stablecoin adoption could lead to higher leverage, maturity mismatch issues, and excessive risk taking — risks that require supervisory attention and robust regulatory safeguards.

Key Takeaways

• Market scale: Stablecoins have enabled significant lending volumes — $670 billion over five years — and are concentrated in USDT and USDC.
• Institutional opportunity: Visa highlights potential for banks and financial institutions to migrate parts of the $40 trillion credit market onto programmable rails, unlocking efficiency gains.
• Regulatory and stability concerns: The IMF cautions about rising leverage and maturity mismatches; recent issuer incidents (Paxos PYUSD mint/burn) show operational risk is real.

Conclusion

Stablecoins present both an opportunity and a challenge for global credit markets: they can lower frictions for lending and cross‑border flows while requiring stronger governance, operational controls, and regulation to mitigate systemic risks. Visa’s report, the IMF’s 2025 Global Financial Stability Report, and recent market incidents such as the Paxos PYUSD minting event underscore the need for coordinated industry and supervisory action. COINOTAG will continue to monitor developments and publish timely analysis as regulators and institutions respond.

Sources (plain text): Visa report; IMF 2025 Global Financial Stability Report; Paxos statement on X; Myriad (DASTAN) user predictions; GENIUS Act; market-cap figures for USDT and USDC as reported in industry data.