Stripe partners with Paradigm to launch Tempo, targeting global payments

Author: CoinW Research Institute

On September 4th, payment giant Stripe announced a joint launch of a new public chain, Tempo, with top crypto venture capital firm Paradigm. Tempo is positioned as a Layer1 chain focused on payments, compatible with EVM, aiming for over 100,000 transactions per second and sub-second confirmation times, targeting real-world applications such as cross-border payments.

The release of Tempo quickly drew market attention. Supporters believe that Stripe’s involvement could push large-scale on-chain payments and usher in a new phase for stablecoins in global financial infrastructure; skeptics argue that Tempo is essentially a consortium chain created by a payment giant for commercial interests. Does Tempo represent a new opportunity or a replay of old problems? In this article, CoinW Research Institute will explore these questions.

1. Tempo’s Positioning and Vision

1.1 Tempo as a Payment-Focused Layer1

Tempo believes that while existing blockchains have made breakthroughs in smart contracts and application ecosystems, they still face three major bottlenecks in payments: high transaction fee volatility, unpredictable settlement delays, and lack of composable modules. For use cases like cross-border clearing, these issues directly limit large-scale adoption. Tempo’s approach is to concentrate resources on the vertical domain of payments, emphasizing stability and efficiency, and to develop a Layer1 chain dedicated to payments. Leveraging Stripe’s merchant network and payment interface advantages, Tempo aims to fill the current infrastructure gap in public chains for payments.

This positioning also challenges the existing payment industry landscape. In traditional systems, networks like Visa have long controlled transaction routing and fee structures, leaving merchants and users often passively accepting the rules. Tempo seeks to migrate this model onto the chain but in a protocolized manner. Features like “stablecoins as Gas” and built-in payment routing make on-chain payments more aligned with real-world scenarios, while ensuring transaction predictability and certainty. Tempo’s goal is not to reinvent a universal public chain ecosystem but to serve as an intermediary layer centered on stability and efficiency, bridging the gap between real-world payment systems and blockchain. If successful, Stripe could elevate from a traditional payment gateway to a rule-maker for settlement, occupying a strategic position in on-chain financial infrastructure.

Source: tempo.xyz

1.2 Core Technical Features of Tempo

Tempo emphasizes payment priority in its design, with technical features focused on stability, compliance, and efficiency. It allows users to pay fees using any stablecoin; dedicated payment channels ensure transactions are unaffected by other on-chain activities, maintaining low costs and high reliability; native support for low-fee swaps between different stablecoins, including enterprise-issued stablecoins, further enhances network compatibility. Additionally, batch transfer functionality via account abstraction enables multiple transactions in one operation, greatly improving fund management efficiency; a whitelist/blacklist mechanism at the protocol level meets regulatory requirements for user permissions, providing necessary compliance safeguards for institutional participation. Lastly, the transaction memo field is compatible with ISO 20022 (an international standard for cross-border financial messaging used in payments, clearing, and securities), making on-chain transactions and off-chain reconciliation smoother.

These features define Tempo’s application scenarios around payments and settlement. In global payments, Tempo can directly support high-frequency activities like cross-border collections; embedded financial accounts enable enterprises and developers to manage funds efficiently on-chain; fast, low-cost remittances could reduce intermediary costs and promote financial inclusion. Furthermore, Tempo can support real-time settlement of tokenized deposits, enabling 24/7 financial services; in micro-payments and smart agent payments, its low costs and automation advantages help expand emerging use cases.

A key distinction from other mainstream stablecoin public chains like Plasma is its “openness.” Tempo allows anyone to issue stablecoins and supports any stablecoin as payment fees directly. Plasma offers zero-fee USDT transfers, customizable Gas tokens, confidentiality features, etc., prioritizing payment efficiency and user experience. Circle’s Arc sets USDC as the native on-chain Gas and, together with stablecoins like USYC, forms a core asset in its ecosystem, deeply integrated with Circle’s payment network and wallets. Overall, Plasma emphasizes payment performance, Arc focuses on compliance and vertical integration, while Tempo aims to build a more diverse stablecoin infrastructure.

1.3 Tempo Still in Testnet Stage

It’s important to note that Tempo is currently in the testnet phase. According to public information, this stage mainly involves a limited testing environment for validating core scenarios like cross-border payments. Performance data announced by the team, such as supporting 100,000 TPS, sub-second confirmation, and stablecoin-as-Gas payment mode, are still being validated in controlled environments.

Currently, Tempo has onboarded partners from the payments, banking, and tech sectors, including Visa, Deutsche Bank, Shopify, Nubank, Revolut, OpenAI, and Anthropic. Tempo plans to pilot with a small group of enterprise users and developers first, ensuring safety, compliance, and user experience before opening wider public testing and mainnet deployment.

2. Main Market Controversies Surrounding Tempo

2.1 Why Doesn’t Tempo Choose Ethereum Layer2?

Tempo did not build on Ethereum Layer2 but instead chose to create a new Layer1 chain, sparking community debate. Since Paradigm has long been viewed as a strong supporter of the Ethereum ecosystem, this move surprised many core members and raised questions. Paradigm co-founder and Tempo leader Matt explained two main reasons: first, existing Layer2 solutions are too centralized. Even top Layer2s like Base still use single-node sequencers, which pose risks of network shutdown if the node fails. As Tempo aims to be a global payment network involving thousands of institutions, reliance on single points of control makes trust difficult. Only a truly multi-node, decentralized validator network can provide the neutrality and security needed for cross-border payments.

Second, settlement efficiency is a concern. Finality on Layer2 depends on Ethereum mainnet, which periodically confirms transactions by batching them back to the main chain. For ordinary users, this means longer wait times for deposits and withdrawals. While small transactions might tolerate this delay, for global payments, it lengthens settlement cycles and diminishes stablecoins’ advantage as real-time settlement tools. In contrast, Tempo seeks sub-second finality and the efficiency required for payments. Building its own Layer1 is to create a bottom layer capable of supporting large-scale payment settlements.

Source: @paradigm

2.2 Concerns Over Tempo’s Neutrality

Tempo claims it will remain neutral, allowing anyone to issue and use stablecoins on-chain. However, some argue this is problematic. First, Tempo is not a fully open public chain at launch but operated by a permissioned set of validators. This contradicts the “anyone can participate freely” narrative. Although users can pay with different stablecoins, the underlying control remains concentrated in a few large institutions. If high-risk entities attempt to issue stablecoins on Tempo, validators like Visa and other licensed institutions are unlikely to process these transactions, undermining neutrality.

Another concern is that historically, few networks have transitioned from permissioned to fully decentralized systems. During startup, control is held by a few entities, which also control profit distribution. From a business perspective, institutions like Visa have little incentive to relinquish this control, especially to future competitors. Therefore, the “neutrality” claimed by Tempo is more a market narrative than a practical reality. Most large financial infrastructures, from Visa to clearinghouses, have trended toward centralization. Breaking this pattern would face significant resistance.

2.3 Tempo as a Consortium Chain

Structurally, Tempo is more akin to a consortium chain. Its validators are not open to all but led by partners. This ensures stability but also concentrates governance power among a few institutions, limiting decentralization and permissionless features emphasized in crypto. It can be seen as embedding a consortium logic from the start, more suitable for enterprise clearing networks than a traditional open blockchain.

Tempo’s value lies in providing a compliant, controllable testing ground for these institutions, rather than surpassing existing public chains technically. Its openness and neutrality are thus limited. While compatible with EVM and connected to Ethereum’s ecosystem, overall, it resembles an alliance chain led by an institutional coalition rather than a truly public infrastructure.

3. Strategic Significance of Tempo

3.1 Stripe’s Crypto Strategy

Tempo is not an isolated event but a natural extension of Stripe’s long-term crypto strategy. From cautious experiments to stablecoin investments and now to building a payments-first public chain, Stripe’s trajectory is becoming clearer. Key milestones include:

·January 2018: Announced halting Bitcoin payments support due to slow transaction speeds and low user interest, ending a 4-year crypto trial.

·October 2024: Resumed crypto payments in the US, supporting merchants accepting USDC and USDP stablecoins with instant USD settlement at lower rates than credit cards.

·February 2025: Acquired stablecoin infrastructure firm Bridge for about $1.1 billion, emphasizing stablecoins as a core driver of cross-border commerce.

·May 2025: Launched stablecoin financial accounts covering 101 countries, supporting stablecoin deposits, withdrawals, and cross-chain payments; partnered with Visa on stablecoin debit cards.

·June 2025: Acquired Web3 wallet infrastructure company Privy to enhance crypto wallet and user account systems.

·September 2025: Officially launched Tempo, positioned as a payments-first Layer1.

3.2 Future Outlook for Tempo

Tempo’s launch signifies a strategic shift for Stripe’s crypto ambitions. Unlike previous feature-focused efforts, Tempo directly targets infrastructure, aiming to reshape the fundamentals of cross-border payments and clearing. It carries Stripe’s ambition to onboard hundreds of millions of merchants and users into on-chain payments and leverages enterprise resources to mainstream blockchain adoption. From a macro perspective, the timing is favorable: stablecoins are increasingly penetrating cross-border payments, savings, and clearing; regulatory frameworks are gradually clarifying. With Stripe’s global merchant network providing natural transaction scenarios, and partners like Visa, Shopify, Deutsche Bank, and OpenAI involved, Tempo could form a “closed-loop” testing environment covering acquiring, clearing, and applications.

However, long-term prospects remain uncertain. Meta’s Libra demonstrated that enterprise-led chains often struggle with compliance pressures and balancing decentralization with market consensus. While Tempo’s design aligns with current regulatory environments, its alliance governance structure implies high concentration of power, risking path dependence. Without gradually opening participation, Tempo might be seen as a commercial extension of Stripe rather than a true public infrastructure. Its future depends on balancing efficiency and openness, gaining institutional trust within regulatory frameworks, and gradually building cross-network consensus. If these conditions are met, Tempo could transcend mere commercial experimentation and evolve into a public infrastructure with broader attributes, with its long-term value emerging through this process.