Nov 25 (Reuters) - Swedish fintech firm Klarna ( KLAR )

on Tuesday said it will launch a U.S. dollar-backed stablecoin,

becoming the latest major payments company to move deeper into

digital assets as regulators tighten oversight of the sector.

The token, called KlarnaUSD, is currently in testing and

will be available on the mainnet in 2026, will be fully backed

by the U.S. dollar the company said.

Stablecoins are cryptocurrencies whose value is tied to

traditional money, and they have surged in use in recent years

as traders seek a relatively steady asset to move funds between

more volatile tokens.

Klarna ( KLAR ) said it aims to position KlarnaUSD for everyday

payments and cross-border transactions, pitching it as a faster

and cheaper alternative to conventional banking.

The buy-now-pay-later company, one of Europe's largest

fintech firms, has its biggest user base in the United States.

The stablecoin will run on Tempo, a payments-focused

blockchain developed by Stripe and crypto investment firm

Paradigm.

Bigger rival PayPal ( PYPL ) launched its own U.S. dollar

token, followed by peer Stripe's launch of a stablecoin after

its $1.1 billion acquisition of crypto firm Bridge earlier this

year.

These moves come as regulators in the U.S. and Europe

advance new rules for digital assets. Klarna ( KLAR ), like other

stablecoin firms, is expected to benefit from frameworks such as

the GENIUS Act in the U.S. and MiCA in Europe.

"Crypto is finally at a stage where it is fast, low-cost,

secure, and built for scale. This is the beginning of Klarna ( KLAR ) in

crypto," CEO Sebastian Siemiatkowski, a once vocal crypto

skeptic, said in a statement.

Klarna ( KLAR ) last week beat analysts' revenue expectations in its

first quarterly report since a blockbuster stock market listing

in September.