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 Layer 1 focused on payments and compatible with EVM, Tempo aims to achieve over 100,000 transactions per second and sub-second confirmation times, targeting real-world applications like cross-border payments.

The release of Tempo quickly drew market attention. Supporters believe Stripe’s involvement could push large-scale on-chain payments and usher in a new phase for stablecoins in global financial infrastructure. Critics 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 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 limit 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 Layer 1 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-driven manner. By design features like “stablecoin as Gas” and built-in payment routing, it makes on-chain payments more aligned with real-world scenarios while ensuring predictability and certainty. Tempo’s goal isn’t to recreate a universal blockchain ecosystem but to serve as an intermediary layer between real-world payment systems and the blockchain world, centered on stability and efficiency. If successful, Stripe could elevate from a traditional payment gateway to a rule-maker in on-chain financial infrastructure.

Source: tempo.xyz

1.2 Core Technical Features of Tempo

Tempo emphasizes payment priority in its design, focusing on stability, compliance, and efficiency. It allows users to pay fees with 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 custom-issued stablecoins, further enhances 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. 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 position Tempo primarily for payment and settlement scenarios. It 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 could foster emerging applications.

A key distinction from other mainstream stablecoin chains like Plasma is its “openness.” Tempo allows anyone to issue stablecoins and supports any stablecoin as payment fees directly. Plasma offers zero-fee USDT transfers, customizable Gas tokens, privacy features, etc., prioritizing payment efficiency and user experience. Circle’s Arc sets USDC as native Gas and, together with stablecoins like USYC, forms core assets 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 validating cross-border payments and other basic scenarios. Performance data such as supporting 100,000 TPS, sub-second confirmation, and stablecoin as Gas 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 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 attributes this to two 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 stoppages if the node fails. As Tempo aims to serve thousands of institutions globally, 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, requiring periodic batch confirmations. For ordinary users, this means longer wait times for deposits and withdrawals. While acceptable for small transactions, it weakens the advantage of stablecoins as instant settlement tools in a global payment system. Tempo seeks sub-second finality and high efficiency, which is why it opted to build its own Layer 1.

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 a fully permissionless chain but 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 with a few large institutions. If high-risk entities attempt to issue stablecoins on Tempo, validators like Visa, which are licensed institutions, are unlikely to process these transactions, undermining neutrality.

Another concern is that historically, networks that start permissioned rarely transition to fully open systems. During launch, 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, 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 more akin 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 the decentralization and permissionless qualities emphasized in crypto. It can be seen as embedding a consortium logic from the start, more suited to enterprise clearing networks 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 compatible with EVM and connected to Ethereum’s ecosystem, overall, it resembles an institution-led alliance chain rather than a 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 exploration to stablecoin focus, and now to building a payments-first public chain, Stripe’s trajectory is becoming clearer:

• 2018 Jan: Ceased Bitcoin payments due to slow speed and low interest, ending a 4-year crypto experiment.
• 2024 Oct: Resumed crypto payments in the US, supporting USDC and USDP, with instant settlement 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 in 101 countries, supporting on-chain 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, as a payments-focused Layer 1.

3.2 Future Outlook for Tempo

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

However, long-term prospects remain uncertain. Meta’s Libra showed that enterprise-led chains face regulatory hurdles and struggle to balance decentralization with market consensus. Tempo’s design aligns with current regulations but 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 true public infrastructure. Its future depends on balancing efficiency, openness, and regulatory trust. If these conditions are met, Tempo could evolve beyond a commercial experiment into a foundational public infrastructure, with its long-term value emerging through this process.