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 firm Paradigm. Tempo is positioned as an EVM-compatible Layer 1 focused on payments, 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 large-scale on-chain payments and usher in a new phase of stablecoin adoption within global financial infrastructure. Critics, however, 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? This article from CoinW Research Institute will explore these questions.

1. Tempo’s Positioning and Vision

1.1 Tempo as a Payment-Focused Layer 1

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 cross-border clearing and similar use cases, these issues directly hinder widespread adoption. Tempo’s approach is to concentrate resources on the vertical domain of payments, emphasizing stability and efficiency, and to develop a Layer 1 dedicated to payments. Leveraging Stripe’s merchant network and payment interface advantages, Tempo aims to fill the current infrastructure gap in blockchain-based payment systems.

This positioning also challenges the existing payment industry landscape. Traditionally, networks like Visa have long controlled transaction routing and fee structures, leaving merchants and users to passively accept these rules. Tempo seeks to migrate this model onto the blockchain but operate it protocolically. By design, with features like “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 blockchain ecosystem but to serve as an intermediary layer—focused on stability and efficiency—between real-world payment systems and the blockchain world. If successful, Stripe could elevate from a traditional payment gateway to a rule-maker for settlement protocols, 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 centered 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 capabilities via account abstraction enable multiple transactions in one operation, greatly improving fund management efficiency; whitelist and blacklist mechanisms at the protocol level meet 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 as centered 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 can foster emerging use cases.

A key distinction from other mainstream stablecoin blockchains like Plasma is its “openness.” Tempo allows anyone to issue stablecoins and supports direct use of any stablecoin as payment fees. In contrast, Plasma offers zero-fee USDT transfers, customizable gas tokens, and privacy features, prioritizing payment efficiency and user experience. Circle’s Arc sets USDC as the native on-chain gas token 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 underlying layer.

1.3 Tempo Still in Testnet

It’s important to note that Tempo remains in the testnet phase. According to publicly available information, this stage mainly involves small-scale validation environments for testing core scenarios like cross-border payments. Performance metrics announced—such as 100,000 TPS, sub-second finality, and stablecoin-as-gas payment mode—are currently validated only in controlled environments.

Tempo has already partnered with several organizations from the payments, banking, and tech sectors, including Visa, Deutsche Bank, Shopify, Nubank, Revolut, OpenAI, and Anthropic. The project plans to pilot with a limited number of enterprise users and developers, ensuring safety, compliance, and user experience before broader public testing and mainnet deployment.

2. Major Market Controversies Surrounding Tempo

2.1 Why Doesn’t Tempo Use Ethereum Layer 2?

Tempo chose not to build on Ethereum Layer 2 but instead to create a new Layer 1, which has sparked community debate. Paradigm, long regarded as a staunch supporter of the Ethereum ecosystem, being involved in this move surprised many core members and drew skepticism. Paradigm co-founder and Tempo leader Matt explained two main reasons: first, existing Layer 2 solutions are too centralized. Even top Layer 2s like Base rely on single-node sequencers, which pose risks of network shutdown if the node fails. Since Tempo aims to be a global payment network involving thousands of institutions, reliance on a single point of control undermines trust. 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 Layer 2 depends on Ethereum mainnet, requiring periodic batch confirmations. For ordinary users, this means longer wait times for deposits and withdrawals. While acceptable for small transactions, this delay hampers the speed and stability needed for global payment systems, reducing stablecoins’ advantage as instant settlement tools. In contrast, Tempo seeks sub-second finality and high efficiency through its architecture. Building a dedicated Layer 1 is thus aimed at creating a truly scalable settlement network.

Source: @paradigm

2.2 Questions About Tempo’s Neutrality

Tempo claims it will remain neutral, allowing anyone to issue and use stablecoins on-chain. However, some critics see logical issues. First, Tempo is not fully open at launch; it 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 concentrated among a few large institutions. If high-risk entities attempt to issue stablecoins on Tempo, licensed validators like Visa are unlikely to process these transactions, undermining neutrality.

Another concern is that historically, few networks that start with permissioned governance have successfully transitioned to fully open systems. During startup, control is held by a few entities, which also control revenue sharing. From a business perspective, institutions like Visa have little incentive to relinquish this control, especially to potential competitors. Therefore, the “neutrality” of Tempo is more a market narrative than a practical reality. Most large financial infrastructures—Visa, 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 set is 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 typical of public blockchains. It can be seen as embedding a consortium logic from the start, more suited to enterprise clearing networks than an 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, Tempo resembles an institution-led alliance 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 to building a payments-first public chain, Stripe’s trajectory is becoming clearer:

• January 2018: Ceased support for Bitcoin payments due to slow transactions and low user interest, ending a four-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, and cross-chain payments; 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, a payments-focused Layer 1.

3.2 Future Outlook for Tempo

Tempo’s launch signifies a strategic shift for Stripe, moving from feature development to infrastructure-level innovation. It aims to reshape cross-border payments and clearing by providing a foundational layer. It carries Stripe’s ambition to onboard hundreds of millions of merchants and users into on-chain payments, leveraging enterprise resources to mainstream blockchain adoption. The macro environment favors Tempo: stablecoins are increasingly penetrating cross-border payments, savings, and clearing; regulatory frameworks are gradually clarifying. With Stripe’s global merchant network, and partners like Visa, Shopify, Deutsche Bank, and OpenAI, Tempo could create a comprehensive “closed-loop” testing environment covering acquiring, clearing, and applications.

However, long-term prospects remain uncertain. Meta’s Libra demonstrated that enterprise-led chains face regulatory hurdles that challenge decentralization and market consensus. While Tempo’s design aligns with current regulations, its alliance governance model implies high centralization, risking path dependence. Without gradually opening participation, Tempo might become merely a commercial extension of Stripe rather than a truly public infrastructure. Its future depends on balancing efficiency, openness, and regulatory trust. If it can gain institutional confidence and build cross-network consensus, Tempo could evolve beyond a commercial experiment into a foundational public infrastructure, with its long-term value emerging through this process.