Visa announced an on-chain lending program on Sept. 8 aimed at solving a recurring timing mismatch in card payments. Card issuers or program operators often need to settle with Visa on a daily schedule before cardholder repayments actually arrive, leaving a short but repeated funding gap.
The new structure uses Credit Coop, an on-chain credit protocol that offers revolving stablecoin credit lines. Participating institutions can draw on those facilities to make settlement payments first, while later cardholder repayments flow back to repay the borrowing. In effect, the arrangement moves a traditional receivables-financing model onto blockchain rails.
Settlement receivables sit at the center of the structure
For stablecoin-linked card programs, the issue is straightforward: whatever repayment pattern cardholders follow, the issuer still has to meet Visa’s settlement timetable. That timing gap can be especially difficult for newer programs. Transaction volume may rise quickly, while bank credit lines or financing backed by receivables fail to keep pace.
Visa said this financing need is growing along with stablecoin card activity. In fiscal Q2 2026, the company said stablecoin-linked card programs exceeded 160, payment volume climbed nearly 200% from a year earlier, and annualized stablecoin settlement volume recently moved past $20 billion, more than 15 times the level in the same period a year ago.
Each metric captures a different part of the business. Program count points to network breadth. Payment-volume growth reflects card activity. The settlement run rate annualizes recent payment flows. Credit Coop’s outstanding principal is a separate measure again. Taken together, though, the figures point in the same direction: more programs may need short-term funding secured by settlement receivables.
How funds move on-chain
According to Visa, participating institutions draw from a revolving stablecoin facility to meet that day’s settlement obligation, and the funds go directly to Visa’s settlement address. Cardholder repayments then pass through Credit Coop’s Spigot contract, a programmable lockbox. Once funds arrive, the contract first pays interest and replenishes the credit line. Only after that does the remainder move to the borrower’s operating account.
Visa described the model as one secured solely by settlement receivables. That sets it apart from standard decentralized finance, or DeFi, lending structures, where borrowers usually have to post crypto collateral worth more than the loan itself. Here, the support for the loan comes from expected payment flows from cardholders.
Every draw and repayment is recorded on-chain, creating timestamps, token-flow records and contract execution history. Visa said Credit Coop has processed more than 3,000 borrowing events and 9,000 repayment events across participating credit arrangements.
Visa also described a second layer of evidence beyond public blockchain data. Credit Coop receives daily authorized settlement files for each program through a secure channel, the company said, and combines those records with on-chain history to determine funding size and verify disbursements and repayments. Public transactions can show where tokens moved. Visa’s own data stream links those movements to specific settlement obligations and operating performance.
That gives Visa a broader role than simple payment processing. Its infrastructure bridges the timing gap, and its records help lenders decide how much capital is needed to cover it.
$2.5 billion financed, but the headline figure has limits
Visa said the Credit Coop model has financed more than $2.5 billion in settlement volume since 2023 with zero defaults. It also said borrower costs in the program have fallen by as much as 30% as lender participation increased.
Those claims need to be read carefully. Cumulative financed settlement volume measures turnover in a revolving facility. The same dollars can be lent, repaid and used again, so the $2.5 billion figure does not describe outstanding principal on any given day. It also should not be read as Credit Coop revenue, total card spending or market share.
The source of the data matters as well. In supporting materials, Visa said the figures were provided by Credit Coop, that on-chain event counts were current through Aug. 19, 2026, and that zero-default status should be reconfirmed before publication. On the claim of lower borrowing costs, Visa did not provide actual financing rates, sample size or calculation methodology.
Rain accounts for most of the disclosed activity
Among the disclosed participants, payments company Rain is Visa’s principal member and represents most of the visible activity. Visa said Rain has used Credit Coop’s revolving credit lines since August 2023. As of Aug. 19, Rain had made more than 2,000 draws and more than 7,000 repayments, representing about $2 billion in cumulative settlement payments.
The repeated pattern of borrowing and repayment over three years suggests an operating system that has been used in practice. What the public data does not show clearly is the shape of the credit risk. Initial facility size, current exposure, lender concentration and performance through a loss cycle were not disclosed.
Karta offers one example of where Visa thinks this can lead
Visa also pointed to Karta as a sign of how far this model might extend. According to Visa, Karta first used Credit Coop funding to launch and expand, then later replaced it with a larger institutional facility.
Karta’s own announcement in June confirmed the later financing round: a $140 million raise led by Galaxy Ventures and Community Investment Management, or CIM. That announcement did not mention Credit Coop, however, so the claim that Karta’s early growth depended on on-chain financing currently rests on Visa’s account alone.
The sequence is still revealing. Smaller programs may be able to use on-chain capital first, borrowing and repaying repeatedly to build an operating record, then move on to traditional institutional financing later. In that sense, blockchain-based credit may function more as a bridge into private credit than as a replacement for it.
Programmable repayment priority does not erase loss risk
Credit Coop’s documentation says a single credit arrangement can include multiple lenders, with repayment priority allocated through cash flows controlled by the Spigot contract. The contract enforces a predefined payment path.
Its technical materials also describe human and software dependencies around that promise. The protocol gives important powers to arbitrators and Spigot owners. Extreme-case documents describe possible revenue-contract changes, diverted cash flows, malicious control and complications in post-default enforcement. There is no indication in the disclosures that any of those events occurred in Visa-related facilities, but they remain design-level risks.
The legal protections attached to each facility are still mostly outside public view. The disclosures do not list every lender behind the Visa-related program, do not provide the full loss waterfall and do not answer several core questions: whether borrowers post first-loss equity or reserves, whether guarantees or insurance exist, and how far lender recourse extends if controlled receivables come up short.
A programmable lockbox can improve lender control over incoming value, but it cannot create value when customers fail to pay or when receivables are disputed. It also cannot route funds that never enter the controlled path. Any resulting loss would depend on protections and contractual rights that Visa and Credit Coop have not fully detailed in public.
What the experiment actually shows
The clearest way to describe this product is not simply as on-chain lending. It is a priority claim on payment flows, serviced at blockchain speed and underwritten with Visa’s records. Public chains supply execution evidence. Visa’s data and credit agreements determine how far that evidence speaks to credit quality.
For the on-chain credit market, the attraction is obvious: the structure addresses a recurring financing need created by card settlement. It also strengthens Visa’s position in the process. The network supplies distribution, critical underwriting data and the context needed to turn token transfers into credit signals.