Klarna and Coinbase Join Forces for Stablecoin Funding

Klarna, a Swedish fintech firm known for its "Buy Now, Pay Later" service, has partnered with Coinbase, a leading crypto exchange. This collaboration aims to integrate stablecoins into Klarna's funding strategies for large investors.

The Plan

• Stablecoin Usage: The initiative involves using USDC, a stablecoin, to secure short-term funding.
• New Investor Base: This move opens Klarna to a new group of investors.
• CFO's Perspective: Niclas Neglén, Klarna's CFO, sees this as an exciting step into a new funding method. He believes stablecoins offer a chance to diversify funding sources in unprecedented ways.

Funding Method

• Existing Sources: The new method will complement Klarna's current funding sources, which include:
• Consumer deposits
• Long-term debt
• Short-term commercial paper
• Risks: Klarna acknowledges potential risks, including regulatory, market, and operational challenges.

Why Coinbase?

• Experience: Klarna chose Coinbase for its expertise in providing crypto infrastructure to large companies.
• Global Support: Coinbase supports over 260 businesses globally, offering services like custody, settlement, and blockchain-based financial solutions.

Additional Crypto Plans

• Wallet Development: Klarna plans to develop wallets and additional digital asset services, expected to progress further by 2026.
• KlarnaUSD: Last month, Klarna launched a US dollar-backed stablecoin called KlarnaUSD, making it the first digital bank to issue a token on Tempo, a new blockchain developed by Stripe and Paradigm.
• Current Status: The stablecoin is live on Tempo’s testnet, with a mainnet launch planned for 2026.

Regulatory Environment

• GENIUS Act: Passed in the United States in July, this act has established clear rules for stablecoins, encouraging more companies to issue their own stablecoins, including Klarna.