Credit cards could include cryptocurrencies as collateral, Visa suggests.
Visa highlights that there are opportunities for individuals to institutional investors.
Financial services giant Visa sees generating yield from self-custodied digital assets as an expanding market opportunity.
Through new generation credit programs and on-chain finance protocols, Users can maintain sovereignty of their assets while accessing liquidity.
In his most recent report about finance on-chainproduced with analytics firm Allium, Visa highlights how users of self-custody wallets, such as Ledger and Trust Wallet, are already participating in global lending markets.
According to the document, protocols like Morpho help “replace traditional networks of bilateral or tripartite lending relationships with a single multilateral lending market.” As CriptoNoticias reported yesterday, this decentralized finance (DeFi) protocol has recently received monetary support from the Ethereum Foundation.
This loan modelwhich connects liquidity in a decentralized way, improves efficiency and interest rates with respect to traditional systems.
Integrating these services directly into wallet apps is key, as “offering financial services within the app gives users fewer reasons to move their assets elsewhere and allows them to borrow rather than sell.”
Looking ahead, the report notes that “credit card programs could soon expand to include digital asset collateral, opening up new market opportunities.”
Nascent programs already allow users to “access liquidity by borrowing against their digital asset holdings while maintaining ownership of them, avoiding capital gains taxes and maintaining exposure to their potential upside.”
In Visa’s view, This infrastructure not only benefits retail users. It also “creates new return opportunities for institutional investors, while reducing counterparty risk through transparent and automated collateral management.” This way, Banks and credit funds could act as liquidity providers for these innovative credit programs.