Klarna debuts USD stablecoin on Tempo testnet to cut fees

Klarna, the Swedish buy now, pay later provider, launched KlarnaUSD, a dollar-pegged stablecoin on the Tempo blockchain. The token is live on Tempo’s testnet today, with a mainnet rollout planned in 2026. The company aims to reduce fees on international payments by using a digital token that settles on a low-cost network. Global payment fees total roughly $120 billion a year, according to the company.

KlarnaUSD is designed for high-volume, low-cost settlement between merchants and partners that move funds across borders. Issuance and redemption are structured to mirror bank transfers while using blockchain rails.

The token is issued through Open Issuance, a stablecoin infrastructure product developed by Bridge, a Stripe subsidiary. Tempo, a payment-focused chain backed by Stripe and Paradigm, launched earlier this year and is built for high throughput and low fees.

During the testnet phase, Klarna plans to validate performance, compliance controls, and partner integrations before moving to production on the mainnet timeline.

CEO Sebastian Siemiatkowski, who had been skeptical of crypto, pointed to improvements in speed, cost, and security as reasons to proceed. In his words: “Crypto is finally at a stage where it is fast, low-cost, secure, and built for scale.” Klarna reports 114 million customers and about $112 billion in annual gross merchandise volume.

Stablecoin use has expanded worldwide. Consulting firm McKinsey estimates annual stablecoin transaction volume near $27 trillion. Industry data shows the supply of USD-denominated stablecoins has climbed from roughly $200 billion at the start of the year to nearly $300 billion. Klarna chose a dollar peg even though it is based in Europe, reflecting where onchain payment demand is concentrated.

Established payments and banking firms are piloting or launching stablecoin settlement tools. Visa introduced a pilot for stablecoin payouts to creators, and large fintech and banks such as JPMorgan have announced stablecoin-based payment products. 

Policymakers are defining rulebooks: the Bank of England has proposed a regime for “systemic” pound stablecoins, Canada included stablecoin measures in its federal budget, and the European Union’s MiCA framework is moving into implementation. In the United States, regulators are discussing how to apply standards in the GENIUS Act, a federal stablecoin framework.

Klarna indicated that partners and developers can begin testing issuance, redemption, and compliance controls for KlarnaUSD on testnet using Open Issuance. The company plans to continue working with Tempo’s ecosystem as both prepare for production workloads focused on cross-border settlement, such as merchant payouts and supplier payments.