Fintech Giant Klarna Launches Stablecoin on Tempo Blockchain

Popular fintech giant Klarna has launched its United States dollar-pegged stablecoin, dubbed KlarnaUSD.

According to the announcement on X, the new digital asset is a first-of-its-kind for the company. It has now gone live on Tempo blockchain, making it the first digital bank to make such a move.

Klarna Plans to Challenge Old Networks With Stablecoin

On November 25, Klarna announced that it has become the first digital bank to launch a stablecoin on Tempo.

This is a new independent payment-designed blockchain started by Stripe and Paradigm. Also, this is the first stablecoin from the global digital bank and flexible payments provider.

The launch of a stablecoin marks a significant pivot for Klarna, whose CEO used to be a vocal crypto skeptic.

The company believes stablecoins could help cut costs significantly for both consumers and merchants. Cross-border payments alone currently generate up to $120 billion in transaction fees each year.

Commenting on the milestone, Sebastian Siemiatkowski, co-founder and CEO of Klarna, highlighted the company’s ability to expand global remittances.

“With 114 million customers and $112 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,” Siemiatkowski asserted.

Concerns Over US Stablecoin Growth

Coincidentally, this is the period when McKinsey estimated that stablecoin transactions have now surpassed $27 trillion a year. It is clear that the area is growing at an alarming rate, hence the increased attention that it is getting.

At this rate, market observers are positive that it could overtake legacy payment networks before the end of this decade.

There are a few entities that have concerns over the massive growth of the stablecoin ecosystem. ECB policymaker and Dutch central bank governor Olaf Sleijpen recently said that the rapid growth could threaten financial stability.

He noted that a run on US stablecoin could trigger a rapid sale of the US Treasuries backing them.

Nevertheless, this concern has not stopped many firms from launching their stablecoin programs.

In mid-November, Visa introduced a pilot program that enables businesses to make fiat payments to individual stablecoin wallets. The recipients can choose to receive USD-backed stablecoins.

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