Klarna Bank AB, a global digital bank and payments provider, today launched KlarnaUSD, the company’s first stablecoin.

Stablecoins are a type of cryptocurrency that pin their token value to traditional currency, in this case, U.S. dollars, so that individual tokens remain $1. Unlike cryptocurrencies such as Bitcoin, stablecoins remain “stable” in value and due to this lack of volatility, which makes them ideal for commerce and financial transactions.

“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,” said Sebastian Siemiatkowski, co-founder and chief executive of Klarna.

Klarna is the first bank to launch a stablecoin on Tempo, an independent blockchain started by online payment processing company Stripe Inc. and crypto investment firm Paradigm, purpose-built for payments.

Although the total market cap for stablecoins has declined slightly, dropping by over $6 billion from a previous peak, it still holds a value of over $300 billion globally. Industry reports revealed that stablecoins processed $9 trillion in payments in 2025, marking an 87% increase from the previous year. In September alone, transactions reached $1.25 trillion. Despite this significant growth, stablecoins account for only 2.3% of global payments, which total over $2 quadrillion annually.

Stablecoins have drawn the attention of payments processors not just because of their lack of volatility, but due to near instant settlements and reduced cost per transaction.

“With 114 million customers and $118 billion in annual GMV, 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,” added Siemiatkowski.

Klarna’s stablecoin token is currently in testing and is expected to be generally available sometime in 2026. The company said it will be fully backed with USD.

Competition is rising in the stablecoin payments industry. PayPal Inc. launched its own USD-backed token in 2023, and Stripe launched its own stablecoin issuance platform this year after acquiring infrastructure company Bridge Ventures Inc. for $1.1 billion in 2024.

Driving the increased adoption of stablecoin capabilities and infrastructure in the United States has been the GENIUS Act, signed in July, which stands for the Guiding and Establishing National Innovation for U.S. Stablecoins Act. The legislation established the first wide-ranging regulatory framework for the digital currency.

Image: SiliconANGLE/Microsoft Designer