Onchain credit reaches new all-time high as DeFi lending eclipses $41 billion

The onchain credit market just set a new record. According to a Galaxy Digital report, crypto-collateralized debt reached $73.6 billion in Q3 2025. DeFi lending protocols accounted for 66.9% of that figure, pushing outstanding onchain loans to an all-time high of $41 billion.

The growth story in numbers

Galaxy Digital attributed the surge to a combination of attractive lending incentives and the introduction of new collateral types on blockchain networks like Plasma, which have broadened the range of assets borrowers can pledge.

A separate analysis from Visa and Allium Labs adds more texture. On-chain lending balances peaked near $19 billion in November 2025, while monthly stablecoin borrowing volumes hit $51.7 billion in August 2025. Since 2020, cumulative stablecoin-denominated loans processed through onchain protocols have surpassed $670 billion.

The tokenized private credit segment has been growing even faster on a relative basis. Active on-chain private credit loans reached roughly $18.9 billion in early 2026, with cumulative originations climbing to $33.7 billion. The sector’s total value locked grew 210% during 2025.

Traditional finance keeps showing up

In September 2026, Visa announced that its partnership with Credit Coop had processed $2.5 billion in cumulative settlement volume, with zero defaults reported across thousands of transactions.

The broader tokenized asset market has expanded from low-single-digit billions to an estimated $30 billion to $46 billion range by mid-to-late 2026. Visa has projected that programmable credit could eventually represent a market measured in trillions.

What’s driving the acceleration

Early DeFi lending was almost entirely dependent on volatile crypto assets like ETH and wrapped Bitcoin. Today, real-world assets, tokenized treasuries, and private credit instruments serve as collateral. Early DeFi lending was dominated by a handful of protocols like Aave and Compound. Now, specialized platforms focused on RWA lending, institutional credit, and structured products are fragmenting the market.

The fastest growth appears to be concentrated in non-stablecoin categories. Tokenized private credit and real-world asset lending platforms are expanding at rates that dwarf the growth in traditional DeFi stablecoin markets.