The fintech giant is partnering with Stripe and Paradigm’s Tempo network, signaling a major push into blockchain-based transactions.

Swedish financial services firm Klarna has officially launched KlarnaUSD, its first stablecoin. The move makes Klarna the first bank to issue a token on Tempo, a payments-focused blockchain developed by Stripe and Paradigm.

This initiative marks a significant strategic shift for the company, which is primarily known for its buy-now-pay-later services. Klarna aims to use its new stablecoin to provide faster and cheaper cross-border payments for its 114 million customers, integrating with Tempo and Stripe’s stablecoin infrastructure provider, Bridge.

Klarna is tapping into a rapidly expanding market. The company noted that stablecoin payment networks are already processing over $27 trillion in annual transaction volume, while separate estimates from Visa place the figure closer to $52.4 trillion over the past year. The total market capitalization for stablecoins has surged to $304 billion, with Tether’s USDT accounting for over 61% of the market with a valuation of $184 billion.

Sebastian Siemiatkowski, the co-founder and CEO of Klarna, highlighted the company’s potential to drive change. “With 114 million customers and $118 billion in annual GMV, Klarna has the scale to change payments globally,” he said. “With Klarna’s scale and Tempo’s infrastructure, we can challenge old networks and make payments faster and cheaper for everyone. Crypto is finally at a stage where it is fast, low-cost, secure, and built for scale.”

Klarna’s entry into the stablecoin space is part of a broader trend of mainstream financial institutions embracing on-chain assets. Companies like PayPal and Société Générale have already launched their own stablecoins, and just last week, BNY Mellon introduced a new money market fund designed to improve the safety of stablecoin reserves.

The institutional appetite for stablecoins is growing. A recent EY-Parthenon survey found that 13% of financial institutions and corporations globally already use them, with over half of non-users planning to adopt them within the next year. The report projects that by 2030, stablecoins could handle between 5% and 10% of all cross-border payments.