Klarna Returns to Crypto with Coinbase Stablecoin Partnership for BNPL Expansion

• Klarna partners with Coinbase to tap stablecoin funding from institutional investors globally.
• The buy now, pay later model expands using crypto-based institutional liquidity.
• Stablecoin adoption accelerates as fintech firms seek faster capital rails worldwide.
• Regulatory clarity and major deals push stablecoins toward financial mainstream acceptance.

Klarna has made a swift return into the world of crypto after years on the sidelines. The buy now, pay later firm confirmed a partnership with Coinbase on Friday. It has now been made clear that this partnership will see the firm use stablecoins, which are funded by institutional investors, and these stablecoins are linked to cash flows that include the US dollar.

Klarna’s primary business involves zero-interest loans extended to consumers during checkout. Customers pay over a period while paying service fees to the merchants. Historically, Klarna has sourced funds for this business from deposits and bond markets. 

However, with the partnership with Coinbase, a new funding option has opened up for Klarna. Institutions are able to source funds from stablecoins as opposed to using fiat currency. Klarna then uses the funds for lending purposes.

Also Read: Over 125 Crypto Groups Oppose GENIUS Act Expansion on Stablecoin Rewards

Klarna’s Stablecoin Move Signals a Broader Fintech Shift

The stablecoin project is yet another step in the crypto direction announced by Klarna since it publicly listed. At the end of November, it announced its own stablecoin, called KlarnaUSD. It has its own blockchain, which is supported by Stripe and Paradigm. Shortly after, it started collaborating with Privy to determine what crypto products it could offer its clients.

However, this move by Klarna is more of a reflection of the growing need and acceptance in the fintech arena. Most fintech firms today believe that stablecoins provide faster and more affordable means of payment. In fact, this notion continues to gain popularity. There have been announcements by SoFi regarding the development of stablecoins. There have been similar declarations by Sony’s banking division. Block has confirmed the support of stablecoins on Cash App.

Industry developments have only served to reinforce people’s faith in stable currencies. Stripe struck a deal to purchase Bridge in a deal amounting to a billion dollars. Circle pulled off one of the most closely followed initial public offerings of the year.

Regulatory certainty was not long in following. In July, President Donald Trump signed a law outlining a stablecoin regulatory structure. As regards Klarna, such a backdrop mitigates the risk the company faces while it tests a new funding model based on cryptocurrencies.

Also Read: Bipartisan Bill Targets Crypto Tax Loopholes and Stablecoin Rules: Report