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Klarna is launching a payment stablecoin, becoming the latest fintech to bet that the digital tokens will reshape cross-border payments.
The Swedish “buy now, pay later” lender said on Tuesday it had launched KlarnaUSD on a blockchain created by payment company Stripe and would use the digital token for international payments.
Klarna said the stablecoin would allow it to “dramatically reduce costs for both consumers and merchants”. One person familiar with the plans said it would reduce the costs for Klarna when moving large amounts of money globally by cutting out parties such as the Swift network.
While the launch was likely to help with Klarna’s internal payment infrastructure initially, it was expected to be rolled out for merchants and consumer payments eventually, the person added.
Stablecoins are a form of privately issued digital cash typically backed by short-term securities or cash-like assets, overwhelmingly linked to US dollars. There were $280bn worth of stablecoins in issuance in September, up from $200bn at the start of the year, according to Citigroup.
Klarna’s push into stablecoins follows a wave of similar announcements by payment companies including PayPal and Stripe.
London-listed fintech Wise and British digital bank Revolut are also working on similar initiatives, according to people familiar with the matter. Wise and Revolut both declined to comment.
Some of the largest US banks have been mulling ways to issue their own stablecoins after President Donald Trump signed the Genius Act earlier this year and created a legal framework for the nascent industry.
Klarna’s crypto offering marks a pivot for Sebastian Siemiatkowski, its outspoken chief executive who previously opposed the technology. The Swedish founder changed his mind earlier this year and said Klarna would become the “last large fintech in the world to embrace” crypto.
The company is seeking to move away from only offering short-term, interest-free loans to consumers towards becoming a digital bank. Shares in the lossmaking fintech have fallen more than 30 per cent since listing in New York in September.
Competition between digital banks and crypto companies is heating up. A growing number of crypto start-ups are looking to make the most of a permissive regulatory environment in the US to apply for banking charters, while more neobanks are coming up with crypto and stablecoin offerings.
Klarna said it would announce more crypto partnerships in the coming weeks.
