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 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 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 in a protocol-driven manner. By design features such as “stablecoin 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 itself from a traditional payment gateway to a rule-maker in on-chain settlement infrastructure, occupying a strategic position in blockchain-based financial infrastructure.

Source: tempo.xyz

1.2 Core Technical Features of Tempo

Tempo emphasizes payment priority in its design, with technical features centered around 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 a single 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. In global payments, Tempo can directly support high-frequency 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 applications.

A key distinction between Tempo and other mainstream stablecoin blockchains like Plasma is its “openness.” Tempo allows anyone to issue stablecoins and supports any stablecoin as payment fees directly. 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 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

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 foundational scenarios like cross-border payments. Performance data announced by the team—such as supporting 100,000 TPS, sub-second finality, and stablecoin as gas—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 small group of enterprise users and developers first, 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 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 halts if the node fails. As Tempo aims to be a global payment network involving thousands of institutions, reliance on centralized control would hinder 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, which involves periodic batch confirmations. 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 instant settlement tools. In contrast, Tempo seeks sub-second finality and the efficiency required for payments. Building its own Layer 1 is thus aimed at creating a truly scalable settlement layer.

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 critics see issues with this claim. First, Tempo is not fully open at launch; it is operated by a permissioned set of validators. This contradicts the “anyone can participate” narrative. Although users can pay with different stablecoins, the underlying control remains concentrated in a few large institutions. If a high-risk actor attempts to issue a stablecoin on Tempo, validators—likely licensed entities like Visa—may refuse to process those transactions, undermining neutrality.

Another concern is that historically, few “permissioned then decentralized” networks have successfully transitioned to open systems. During startup, control is held by a few entities, which also hold the benefits. From a business perspective, institutions like Visa have little incentive to relinquish this control, especially if it benefits competitors. Therefore, the “neutrality” of 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 often viewed as closer to a consortium chain. Its validator access is not open to all but led by partner organizations. 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 aligned with enterprise clearing networks than open blockchain.

Tempo’s value lies in providing a compliant, controllable testing ground for these institutions, rather than surpassing existing public chains in technology. 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 a consortium 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 experimentation 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 four-year crypto experiment.
• 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 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-level integrations to infrastructure-level innovation. 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” testing 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. While Tempo’s design aligns with current regulations, its alliance governance structure implies high centralization, which could hinder broader adoption. Without opening up participation gradually, Tempo might be viewed as a commercial extension of Stripe rather than a public infrastructure. Its future depends on balancing efficiency, openness, and regulatory trust. If it can build sufficient cross-network consensus and gradually introduce more open participation, Tempo could transcend mere commercial trials and evolve into a foundational public infrastructure, with its long-term value emerging through this process.