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 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 payment adoption and usher in a new phase for stablecoins 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. These issues directly hinder large-scale adoption in areas like cross-border clearing. 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 structure. 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 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 recreate 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 tokens—further enhances network compatibility. Additionally, batch transfer functions via account abstraction enable multiple transactions in one operation, greatly improving fund management efficiency; whitelist and blacklist mechanisms meet regulatory requirements for user permission management, 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. For 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 could 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 native on-chain gas and, together with stablecoins like USYC, forms a core asset 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 Stage

It’s important to note that Tempo remains in the testnet phase. According to public information, this stage involves a limited environment primarily for testing cross-border payments and other foundational scenarios. Performance metrics announced—such as 100,000 TPS, sub-second finality, and stablecoin-as-gas payment mode—are currently validated only in controlled settings.

Tempo has already partnered with several industry players including Visa, Deutsche Bank, Shopify, Nubank, Revolut, OpenAI, and Anthropic. The project plans to pilot with select enterprise users and developers first, 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 Use Ethereum Layer 2?

Tempo chose not to build on Ethereum Layer 2 but instead to create a new Layer 1, sparking community debate. Paradigm has long been viewed as a strong supporter of the Ethereum ecosystem, so this move surprised many core members and drew skepticism. Paradigm co-founder and Tempo leader Matt explained that two main reasons influenced this decision: 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 centralized nodes would undermine trust. A truly decentralized, multi-node validator network is necessary to meet the neutrality and security demands of cross-border payments.

Second, settlement finality is a concern. Layer 2 solutions depend on Ethereum mainnet for final confirmation, which involves periodic batchings. For ordinary users, this means longer wait times for deposits and withdrawals. While acceptable for small transactions, this delays settlement in a global payment system, reducing stablecoins’ advantage as instant settlement tools. Tempo seeks sub-second finality and high efficiency, making a self-built Layer 1 more suitable for large-scale payment settlement.

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 permissionless at launch; it is operated by a set of authorized validators. This contradicts the “anyone can participate” 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, networks that start permissioned and then attempt decentralization rarely succeed. During initial phases, 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 future competitors. Therefore, the claim of “neutrality” 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 Is Tempo More Like a Consortium Chain?

Structurally, Tempo is often viewed as closer 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 decentralization and permissionless features typical of public blockchains. It can be seen as embedding a consortium logic from the start, more akin to a clearing network among enterprises 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 it maintains EVM compatibility and technical ties to Ethereum, overall, it resembles an alliance chain led by institutional consortiums 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 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 fees 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 across 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, a payments-focused Layer 1.

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 core logic of cross-border payments and clearing, carrying Stripe’s ambition to onboard hundreds of millions of merchants and users into on-chain payments. By leveraging enterprise resources, it seeks to mainstream blockchain adoption.

The macro environment favors Tempo’s prospects: stablecoins are increasingly penetrating cross-border payments, savings, and clearing; regulatory frameworks are gradually clarifying. Stripe’s global merchant network provides natural transaction scenarios, complemented by partners like Visa, Shopify, Deutsche Bank, and OpenAI, creating a “closed-loop” test environment covering acquiring, settlement, and applications.

However, long-term risks remain. Meta’s Libra demonstrated that enterprise-led chains often struggle with compliance and decentralization. Tempo’s design aligns with current regulations but its alliance governance structure implies high centralization, which could limit its evolution into a fully open infrastructure. Without introducing more open participation mechanisms, Tempo might be viewed as a commercial extension of Stripe rather than a public good. Its future depends on balancing efficiency, openness, and regulatory acceptance, and whether it can build cross-network consensus. If these conditions are met, Tempo could transcend pilot status and evolve into a truly public infrastructure, with its long-term value emerging through this process.