Stripe partners with Paradigm to launch Tempo, targeting global payments

Author: CoinW Research Institute

On September 4th, payment giant Stripe announced a joint effort with top crypto venture Paradigm to launch a new public chain, Tempo. Positioned as an EVM-compatible Layer 1 focused on payments, 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 within the global financial infrastructure. Critics, however, argue that Tempo is essentially a consortium chain created by a payment industry giant for commercial interests. Does Tempo represent a new opportunity or a replay of old challenges? In this article, CoinW Research Institute explores 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 infrastructure gap that current public chains face in payment processing.

This positioning also challenges the current industry landscape. In traditional systems, clearing networks like Visa have long controlled transaction pathways and fee structures, leaving merchants and users largely passive recipients of existing rules. Tempo seeks to migrate this model onto the blockchain but operate it protocol-wise. By implementing 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 recreate a universal public chain ecosystem but to serve as an intermediary layer—centered 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 key player in setting settlement rules, 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 transaction 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 guarantees for institutional participation. Lastly, the transaction memo field is compatible with the ISO 20022 standard (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 position Tempo primarily for payment and settlement scenarios. 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-cost and automation advantages could foster emerging applications.

A key distinction from other mainstream stablecoin blockchains 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 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 infrastructure.

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 validating cross-border payment scenarios. Performance metrics announced—such as supporting 100,000 TPS, sub-second finality, and stablecoin-as-gas payment mode—are currently verified 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 expanding to larger 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, long regarded as a staunch supporter of the Ethereum ecosystem, being behind Tempo’s development, made this move surprising to many core members and drew skepticism. Paradigm co-founder and Tempo leader Matt attributes this decision to two reasons: first, existing Layer 2 solutions are overly centralized. Even top Layer 2s like Base rely on single-node sequencers, which pose risks of network shutdown if the node fails. As Tempo aims to serve a global payment network involving thousands of institutions, reliance on a single control point is problematic for 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, such delays could extend settlement cycles for global payments, undermining stablecoins’ role as real-time settlement tools. In contrast, Tempo seeks sub-second finality and efficiency tailored for payments. Building its own Layer 1 is thus aimed at creating a foundational network capable of handling large-scale payment settlements.

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 here. First, Tempo is not a fully open public chain 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 in a few large institutions. If high-risk entities attempt to issue stablecoins on Tempo, validators—mainly licensed institutions like Visa—are unlikely to process such transactions, undermining neutrality.

Another concern is that historically, few networks that start with permissioned governance and then transition to decentralization have succeeded. During launch, control is held by a few entities, which also control profit distribution. From a business perspective, institutions like Visa have little incentive to relinquish this control, especially if it benefits 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. For Tempo to break this pattern, it would face significant resistance.

2.3 Is Tempo More Like a Consortium Chain?

Structurally, Tempo is often criticized as being 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, conflicting with the decentralized, permissionless ethos 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 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 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 experiments to stablecoin focus, and now to building a payments-first public chain, Stripe’s trajectory is becoming clearer:

• 2018 January: Ceased Bitcoin payments support due to slow transactions and low user interest, ending a 4-year crypto experiment.
• October 2024: Resumes crypto payments in the US, supporting USDC and USDP stablecoins with instant USD settlement at lower rates than credit cards.
• February 2025: Acquires stablecoin infrastructure firm Bridge for about $1.1 billion, emphasizing stablecoins as a core driver for cross-border commerce.
• May 2025: Launches stablecoin financial accounts across 101 countries, supporting deposits, withdrawals, cross-chain payments, and a Visa partnership for stablecoin debit cards.
• June 2025: Acquires Web3 wallet infrastructure company Privy to enhance crypto wallet and user account systems.
• September 2025: Officially releases Tempo, positioning it as 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, leveraging enterprise resources to mainstream blockchain adoption. With hundreds of millions of merchants and users, Stripe’s network provides natural on-chain transaction scenarios, while partnerships with Visa, Shopify, Deutsche Bank, OpenAI, and others help build a comprehensive ecosystem 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. Although Tempo’s design aligns with current regulations, its governance structure—more akin to an alliance chain—implies high concentration of power. Without gradually opening participation, Tempo risks being 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 gradually incorporate broader participation and build cross-network consensus, Tempo could evolve beyond a commercial trial into a foundational public infrastructure, with its long-term value emerging through this process.