By PYMNTS | October 19, 2026
Highlights
More than $10 billion has entered crypto vaults, up from $4 billion at the start of 2025, putting more digital assets into lending and staking strategies.
Vault depositors can earn yield while assuming exposure to borrowers, collateral, smart contracts and automated liquidations.
The expansion is drawing regulatory attention to curators that select strategies and set risk parameters while operating outside many of the structures used in conventional asset management.
More digital assets are moving into lending strategies, turning stablecoin and cryptocurrency holdings into credit exposure for investors seeking yield. The growth shows how the uses for digital assets are expanding.
Stablecoins and other tokens sit in wallets, move through payments or are deployed as capital. Vaults are drawing more of that capital into lending and other strategies designed to produce returns.
More than $10 billion has been deposited into crypto vaults, up from $4 billion at the beginning of 2025, the Financial Times reported Monday (Oct. 19), citing Blockworks data. Strategies commonly offer returns between 3% and 10%, while some riskier strategies offer 20% or more.
The risk follows the assets.
Crypto vaults generally use smart contracts to allocate deposited assets, the report said. Many also employ curators that select strategies, set risk parameters and collect fees. They remain exposed to the quality and liquidity of that collateral and to the rules governing liquidation. FinTechs with large stablecoin balances, digital asset treasury companies and hedge funds are among the principal vault depositors.
A FinTech holding stablecoins for payments or other operations has a liquid digital asset. Moving some of those holdings into a vault adds a return, but it also replaces some of that liquidity with exposure to a lending strategy.
Risks can compound quickly. Vaults commonly use automatic liquidation mechanisms that sell collateral when positions breach specified thresholds. Sharp declines can produce simultaneous liquidations and additional selling. Smart contracts can fail or contain assumptions that cease to hold when markets move.
Tracking Decentralized Infrastructure Exposure
The report cited the March hack of decentralized protocol Resolv. Its USR token served as collateral in some vaults where its price had been hard-coded at $1. When its market price plunged, those vaults did not recognize the decline in the collateral’s value.
That exposure is arriving as firms build infrastructure aimed at institutional users. Gauntlet raised $125 million in July after expanding into curated vaults, PYMNTS reported. The company said it had more than $1.5 billion in supplied assets across its vaults and integrations with more than 150 FinTechs and institutions.
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The expansion comes amid a broader move to make digital assets usable rather than simply held.
The PYMNTS Intelligence report “From Asset to Everyday Money: Making Digital Currencies Spendable” found in July that 27% of stablecoin holders already use the assets directly to buy goods and services. Meanwhile, 42% want to use digital assets for major purchases, compared with 28% who do so, and 71% of stablecoin holders said they would use a linked debit card to spend their holdings.
Vaults create another destination for the same digital liquidity. Instead of spending a stablecoin balance, its owner can lend it through an on-chain strategy and collect a return.
The interface used to access digital assets affects demand. The PYMNTS Intelligence report “Digital Currency at the Credit Union: The Gap Between Interest and Access” found in May that 12% of credit union members were very or extremely interested in accessing stablecoins through a digital wallet, more than twice the 5% expressing that level of interest in direct stablecoin payments.
As for institutions, for a company holding substantial stablecoin balances, deploying them for yield means deciding how much liquidity it is prepared to exchange for credit, collateral and technology exposure.
Regulators are now examining who controls those decisions.
Securities and Exchange Commission Commissioner Hester Peirce said in July that a vault holding securities or allocating assets to securities investments could fall into investment company territory. She also said lending strategies can carry federal securities law implications depending on their structure and activities.
In May, SEC Chairman Paul Atkins called for clearer rules covering on-chain financial activity, including crypto vaults, PYMNTS reported.
With vault deposits already above $10 billion, lending is absorbing a larger share of activity. Banks and FinTechs watching stablecoins as payment and treasury instruments must now also watch capital moving into credit markets where the yield comes with borrower, collateral, liquidation and smart contract exposure.