Visa has released a report on stablecoin-based DeFi lending, highlighting a “new risk model.” This is because smart contracts mean that loan collateral can be automatically liquidated, reducing counterparty risks. Today, the vast majority of DeFi loans are based on collateral, something banks are quite familiar with. The report highlights a new case study.
Much of the paper explores DeFi lending statistics, such as September figures of average active loans of $14.8 billion and an average borrowing APR of 6.7% for the year through August 2025.
Although the majority of the report was written by Visa partner Allium, some aspects were written by Visa, resulting in conflicting messages. For example, Visa wrote: “Our goal is to help our network of more than 15,000 financial institutions deeply understand this emerging ecosystem and provide them with the infrastructure and capabilities necessary to participate in on-chain lending and payments. But the next paragraph says: “Chain lending is reinventing financial services using smart contracts to automate and facilitate intermediation instead of traditional institutions. » In other words, on-chain lending replaces you, the bank. This may not be the message Visa was trying to communicate. This is where the report seems to be missing a thing or two.
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