Although fintech firms have cautiously experimented with cryptocurrencies for years, Klarna has taken a decisive step by launching KlarnaUSD, a US dollar–backed stablecoin issued on Stripe’s Tempo blockchain to streamline cross-border settlement flows. The stablecoin is fully backed by dollars to provide price stability and reduce the volatility associated with other crypto assets, and it will initially be deployed for internal settlement flows before a planned expansion to merchant and consumer payments in 2026. Klarna’s issuance leverages Stripe’s Open Issuance powered by Bridge, positioning the company as the first neobank to issue a token on that platform, and reflecting a strategic pivot toward embracing crypto infrastructure amid intensifying competition and rising demand for digital payments. The new initiative is currently being tested on Tempo’s testnet and Klarna has said further partners will be revealed soon, with a public launch planned for 2026 and deployment on Tempo preceding that rollout, underscoring its status as the first bank to issue a stablecoin on the platform. Klarna said the initial rollout will be limited to internal use, emphasizing operational control and risk mitigation as it scales internally.
The move is intended to lower costs and accelerate payment times by bypassing legacy intermediaries, such as correspondent banks and the SWIFT network, which contribute to the estimated $120 billion in annual cross-border payment fees. Stablecoin-based settlement enables near-instant finality and reduced foreign exchange friction, which can improve transaction margins and speed for both merchants and consumers, and the reduced reliance on traditional rails also aligns with Klarna’s goal to offer more scalable, banking-like services without full dependence on US banking partners. These operational efficiencies are expected to benefit Klarna’s global merchant relationships and end customers by cutting conversion fees and correspondent charges.
Klarna’s market position, with 114 million customers and more than $112 billion in annual gross merchandise volume, provides a large onramp for scaling blockchain payments, and the company’s revenue and transaction growth offer a practical foundation for broadening crypto initiatives. The partnership with Stripe, which already processes payments for Klarna in many markets, and the underlying Tempo blockchain built with Paradigm, combine fintech and crypto expertise to support technical deployment, while additional partnership announcements are anticipated as the ecosystem matures.
Risks remain, including regulatory uncertainty, operational integration challenges, and liquidity management for on-chain reserves, and these factors warrant cautious implementation and rigorous compliance as Klarna expands its stablecoin use beyond internal settlement.
