Stripe partners with Paradigm to launch Tempo, targeting global payments

Author: CoinW Research Institute

On September 4th, payment giant Stripe announced a partnership with top crypto venture Paradigm to launch a new public chain, Tempo. Positioned as a Layer1 focused on payments and compatible with EVM, Tempo aims to achieve over 100,000 transactions per second with 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 in 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 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 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 payment sector, emphasizing stability and efficiency, and to develop a Layer1 dedicated to payments. Leveraging Stripe’s merchant network and payment interfaces, Tempo aims to fill the infrastructure gap in current public chains.

This positioning challenges the current payment industry landscape. Traditionally, networks like Visa have long controlled transaction routing and fee structures, leaving merchants and users with passive acceptance of existing rules. Tempo seeks to migrate this model onto the blockchain but in a protocol-based manner. By designing features like “stablecoin as Gas” and built-in payment routing, it aims to make on-chain payments more aligned with real-world scenarios while ensuring transaction predictability and certainty. Tempo’s goal is not to recreate a universal public chain ecosystem but to serve as an intermediary layer that bridges real-world payments and blockchain. If successful, Stripe could evolve from a traditional payment gateway into a rule-maker for settlement and occupy 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 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), 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 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 payment scenarios, its low costs and automation facilitate emerging applications.

A key distinction from other mainstream stablecoin chains like Plasma is its “openness.” Tempo allows anyone to issue stablecoins and supports their direct use 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 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 infrastructure.

1.3 Tempo Still in Testnet

It’s important to note that Tempo remains in the testnet phase. According to public information, this stage involves a limited environment for testing basic scenarios like cross-border payments. Performance data such as supporting 100,000 TPS, sub-second finality, and stablecoin as Gas 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, ensuring safety, compliance, and user experience before broader public testing and mainnet deployment.

2. Main Market Controversies Surrounding Tempo

2.1 Why Not Build on Ethereum Layer2?

Tempo chose not to build on Ethereum Layer2 but instead to create a new Layer1, sparking community debate. Paradigm, long regarded as a staunch supporter of the Ethereum ecosystem, was surprised by this move, raising questions within the community. Paradigm co-founder and Tempo leader Matt attributes this to two reasons: first, existing Layer2 solutions are too centralized. Even top Layer2s like Base rely on single-node sequencers, which pose risks of network halts if the node fails. For a global payment network involving thousands of institutions, reliance on centralized control is problematic. Tempo believes that 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 involves periodic batch confirmations. For ordinary users, this means longer wait times for deposits and withdrawals. While small transactions can tolerate delays, large-scale global payments require faster settlement, which reduces the advantage of stablecoins as instant settlement tools. Tempo aims for sub-second finality and high efficiency, justifying its decision to build a dedicated Layer1.

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 argue this is problematic. Initially, Tempo is not fully permissionless; it is operated by a set of authorized 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 “permissioned then decentralized” networks have successfully transitioned to open systems. During startup, control by a few institutions often means they hold the benefits and decision-making power. From a business perspective, Visa and similar entities have little incentive to relinquish this control, especially to potential 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 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 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 experiments to stablecoin investments and now to building a payments-first public chain, Stripe’s trajectory is becoming clearer:

• 2018 Jan: Ceased Bitcoin payments due to slow speeds and low interest, ending a 4-year crypto trial.
• 2024 Oct: Resumed crypto payments in the US, supporting USDC and USDP, with instant settlement to USD and lower fees than credit cards.
• 2025 Feb: Acquired stablecoin infrastructure firm Bridge for ~$1.1 billion, emphasizing stablecoins as a core driver for cross-border commerce.
• 2025 May: Launched stablecoin financial accounts across 101 countries, supporting deposits, withdrawals, cross-chain payments, and partnered with Visa on a stablecoin debit card.
• 2025 Jun: Acquired Web3 wallet infrastructure company Privy to enhance crypto wallet and user account systems.
• 2025 Sep: Officially launched Tempo, positioning it as a payments-focused 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, leveraging enterprise resources to mainstream blockchain adoption. With hundreds of millions of merchants and users, Stripe’s network provides natural transaction scenarios, while collaborations with Visa, Shopify, Deutsche Bank, OpenAI, and others help build a comprehensive ecosystem covering acquiring, settlement, and applications.

However, long-term prospects remain uncertain. Meta’s Libra demonstrated that enterprise-led chains face regulatory challenges that hinder decentralization and market consensus. Although Tempo’s design aligns with current regulations, its consortium governance implies high centralization, risking path dependence. Without gradually opening participation, Tempo might become merely a commercial extension of Stripe rather than a public infrastructure. Its future depends on balancing efficiency, openness, and regulatory trust, and whether it can build cross-network consensus. If these conditions are met, Tempo could evolve beyond a commercial trial into a foundational public infrastructure, with its long-term value emerging through this process.