Finance
Klarna to launch dollar-backed stablecoin as race in digital payments heats up
Published by Global Banking and Finance Review
Posted on November 25, 2025
2 min readLast updated: January 20, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on November 25, 2025
2 min readLast updated: January 20, 2026
Klarna announces KlarnaUSD, a USD-backed stablecoin, aiming to enhance digital payments. It follows similar moves by PayPal and Stripe amid tightening regulations.
(Reuters) -Swedish fintech firm Klarna on Tuesday said it will launch a U.S. dollar-backed stablecoin, becoming the latest major payments company to move deeper into digital assets as regulators tighten oversight of the sector.
The token, called KlarnaUSD, is currently in testing and will be available on the mainnet in 2026, will be fully backed by the U.S. dollar the company said.
Stablecoins are cryptocurrencies whose value is tied to traditional money, and they have surged in use in recent years as traders seek a relatively steady asset to move funds between more volatile tokens.
Klarna said it aims to position KlarnaUSD for everyday payments and cross-border transactions, pitching it as a faster and cheaper alternative to conventional banking.
The buy-now-pay-later company, one of Europe's largest fintech firms, has its biggest user base in the United States.
The stablecoin will run on Tempo, a payments-focused blockchain developed by Stripe and crypto investment firm Paradigm.
Bigger rival PayPal launched its own U.S. dollar token, followed by peer Stripe's launch of a stablecoin after its $1.1 billion acquisition of crypto firm Bridge earlier this year.
These moves come as regulators in the U.S. and Europe advance new rules for digital assets. Klarna, like other stablecoin firms, is expected to benefit from frameworks such as the GENIUS Act in the U.S. and MiCA in Europe.
"Crypto is finally at a stage where it is fast, low-cost, secure, and built for scale. This is the beginning of Klarna in crypto," CEO Sebastian Siemiatkowski, a once vocal crypto skeptic, said in a statement.
Klarna last week beat analysts' revenue expectations in its first quarterly report since a blockbuster stock market listing in September.
(Reporting by Pritam Biswas in Bengaluru; Editing by Tasim Zahid)
A stablecoin is a type of cryptocurrency whose value is pegged to a stable asset, such as the U.S. dollar, to minimize price volatility and facilitate easier transactions.
Digital assets are any assets that exist in a digital form, including cryptocurrencies, digital currencies, and tokens, which can be used for various transactions and investments.
Regulators oversee the digital asset market to ensure compliance with laws and protect investors from fraud, ensuring the stability and integrity of financial systems.
The buy-now-pay-later model allows consumers to purchase goods immediately and pay for them over time, often without interest, making it easier for consumers to manage their finances.
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