Klarna, the Sweden-based digital bank known for its “buy now, pay later” offering, said Tuesday that it will debut a U.S. dollar stablecoin, becoming the latest global fintech tapping blockchain rails to power global transfers.
Dubbed KlarnaUSD, the token is set to go live on Tempo, a blockchain developed by Stripe and Paradigm specifically for payment use cases. The token will be issued through Bridge, Stripe’s stablecoin infrastructure product, and is currently in test mode. A full public rollout is planned for next year.
Klarna is the latest financial institution to embed stablecoins and blockchain tech into its operations, marking a shift for the company whose CEO once dismissed crypto tech altogether. Banks and fintechs are increasingly turn to stablecoins to cut transaction costs and settlement time. Last month, remittances service provider Western Union announced to introduce a stablecoin on the Solana SOL$135.67 network with Anchorage Digital.
Klarna said that the token will help reduce the cost of cross-border payments, a space where global fees add up to roughly $120 billion a year. The move makes Klarna the first bank to tap Stripe’s stablecoin stack for blockchain-powered payments. The partnership also builds on Klarna’s existing work with Stripe, which handles much of Klarna’s payments processing globally.
“Crypto is finally at a stage where it is fast, low-cost, secure, and built for scale,” said Sebastian Siemiatkowski, co-founder and CEO of Klarna. “With 114 million customers and $112 billion in annual GMV [gross merchandise value], Klarna has the scale to change payments globally: with Klarna’s scale and Tempo’s infrastructure, we can challenge old networks and make payments faster and cheaper for everyone.”
Klarna hinted in the press release at more crypto-related partnerships to come in the weeks ahead.
Read more: Stablecoin Payments Projected to Top $1T Annually by 2030, Market Maker Keyrock Says
