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 accelerate the onboarding of payments onto the blockchain, opening 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 explores 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 a lack of scalable 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 infrastructure gap in current public chains.

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 passively subject to existing rules. Tempo seeks to migrate this model onto the blockchain but operate it protocol-wise. By design features such as “stablecoins as Gas” and built-in payment routing, on-chain payments become 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 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 tokens, further enhances network compatibility. Additionally, batch transfer functions via account abstraction enable multiple transactions in one operation, greatly improving fund management efficiency; whitelist/blacklist mechanisms meet regulatory requirements for user permission management, providing necessary compliance guarantees 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 applications.

A key distinction from other mainstream stablecoin public chains like Plasma is its “openness.” Tempo allows anyone to issue stablecoins and supports their direct use as payment fees. Plasma offers zero-fee USDT transfers, customizable Gas tokens, privacy support, etc., prioritizing payment efficiency and user experience. Circle’s Arc sets USDC as native on-chain Gas and, together with stablecoins like USYC, forms core assets 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 creates 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 validation environment for testing fundamental scenarios like cross-border payments. Official performance data—such as supporting 100,000 transactions per second, sub-second confirmation, and stablecoin as Gas—are still being validated in controlled environments.

Currently, Tempo has partnered with several organizations from payments, banking, and tech sectors, including Visa, Deutsche Bank, Shopify, Nubank, Revolut, OpenAI, and Anthropic. Tempo states it will initially pilot with select enterprise users and developers, ensuring safety, compliance, and user experience before broader 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, which has sparked community discussion. Since Paradigm has long been regarded as a strong supporter of the Ethereum ecosystem, this move surprised many core members and raised questions. Paradigm co-founder and Tempo leader Matt attributes this to two considerations: 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. Tempo believes that only a truly multi-node, decentralized validator network can provide the neutrality and security needed for cross-border payments.

The second reason relates to settlement efficiency. Finality on Layer2 depends on Ethereum mainnet, which periodically confirms bundled transactions. For ordinary users, this means longer wait times for deposits and withdrawals. While small transactions may 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 efficiency tailored for payments. Building its own Layer1 is to create a foundational network 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 statement has logical issues. First, Tempo is not a fully open public chain at launch but is 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 with 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 that start with permissioned phases have successfully transitioned to fully open systems. When enterprises hold operational control during launch, they also control profit distribution. From a business perspective, institutions like Visa have little incentive to relinquish this control, especially to future competitors. Therefore, Tempo’s “neutrality” 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 validator access is not open to all but led by partners. This ensures stability but also concentrates governance power among a few institutions, limiting the decentralization and permissionless qualities emphasized in crypto. It can be seen as embedding a consortium logic from the start, more suited to enterprise clearing networks than to 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 it maintains EVM compatibility and technical ties to Ethereum, overall, it resembles an institution-led consortium chain 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 early experiments to stablecoin focus and now building a payments-first public chain, Stripe’s trajectory is becoming clearer. Key milestones include:

·January 2018: Announced halting Bitcoin payments 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 in 101 countries, supporting stablecoin deposits, withdrawals, cross-chain payments, and partnered with Visa on a stablecoin debit card.

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

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

3.2 Future Outlook for Tempo

Tempo’s launch signifies a strategic shift for Stripe, moving from feature-level experiments to infrastructure-level deployment. It aims to reshape the fundamentals of cross-border payments and clearing, carrying Stripe’s ambition to onboard hundreds of millions of merchants and users onto on-chain payments. By leveraging enterprise resources, it seeks to mainstream blockchain adoption. The macro environment is favorable: stablecoins are increasingly penetrating cross-border payments, savings, and clearing; regulatory frameworks are becoming clearer. With Stripe’s global merchant network providing natural transaction scenarios, and partners like Visa, Shopify, Deutsche Bank, OpenAI involved, Tempo could create 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 regulations, its consortium governance implies high centralization, risking path dependence. Without gradually opening participation, Tempo might be viewed as a commercial extension of Stripe rather than a genuine public infrastructure. Its future depends on balancing efficiency, openness, and gaining institutional trust within a compliant framework. If these conditions are met, Tempo could transcend mere commercial testing and evolve into a public infrastructure with broader societal value.