- Stripe unveils Tempo, its innovative layer 1 blockchain solution.
- CEO Patrick Collison highlights Tempo’s potential to enhance on-chain financial services.
- However, a key individual involved in Facebook’s Libra project expresses skepticism.
Global financial technology leader Stripe is presenting Tempo, its newly developed blockchain
technology, as a groundbreaking advancement in the world of international payments.
Christian Catalini, a principal figure behind Meta’s ultimately unsuccessful Libra stablecoin
initiative, suggests that Stripe’s Tempo is vulnerable to the very same underlying structural
weakness that led to Libra’s downfall.
“Stripe’s approach is a familiar one: a stellar team, premier collaborators, and a promise of
impartiality,” Catalini
elaborated in a detailed analysis
on X (formerly Twitter). “The cost of this arrangement? Granting the fintech giant significant
control over the global payments landscape.”
Stripe isn’t the only major player exploring the creation of a layer 1 blockchain. In late August,
Google
revealed
its plans to introduce GCUL, a centralized blockchain platform designed to “foster innovative
payment solutions and financial market products.”
These developments coincide with the expansion of the stablecoin market, driven partly by the
Genius Act, a stablecoin-focused law enacted by US lawmakers, which encourages participation in
digital assets from institutional investors.
Libra deja vu
Catalini has experienced a similar situation before.
Back in 2019, prior to Facebook’s rebranding as Meta, Mark Zuckerberg, along with a coalition of
prominent tech and financial organizations, introduced Libra, a stablecoin venture aimed at global
implementation. The project was later renamed Diem.
Libra’s promise was to extend financial services to billions of individuals. However, legislators
and regulatory bodies quickly opposed the idea of handing over monetary authority to Silicon
Valley.
“We weren’t simply ahead of our time; we were exceptionally wrong,” Catalini reflected. “We were
suffering from a severe case of Silicon Valley arrogance – the notion that sophisticated code can
easily dismiss centuries of established financial regulations.”
Despite Meta’s recruitment of seasoned regulator Stuart Levey and its near-acquisition of
approval from Swiss regulatory entity FINMA, Libra was ultimately abandoned due to global
lawmakers’ concerted opposition.
Catalini stated that the license “was physically located on the FINMA president’s desk, awaiting
signature. However, [former Federal Reserve Chair] Janet Yellen intervened.”
He contends that the fundamental error was not regulatory obstruction, but rather the network’s
centralized architecture.
Enter Stripe
On September 4th, Stripe announced collaborative plans with Paradigm to launch Tempo.
Patrick Collison, Stripe’s CEO,
identified
Anthropic, Coupang, Deutsche Bank, DoorDash, Lead Bank, Mercury, Nubank, OpenAI, Revolut,
Shopify, Standard Chartered, and Visa as initial design partners.
He asserted that current blockchain technologies are inadequate to manage the burgeoning stablecoin
market. He said the novel layer 1 design would be highly scalable, and designed to meet the
needs of real-world financial applications.
“Our aspiration is that Tempo will facilitate the on-chain movement of activities such as payment
acceptance, global payouts, remittances, microtransactions, tokenized deposits, agentic payments,
and more,” Collison stated on X.
What’s at stake
Catalini doesn’t seem to be as confident regarding the prospect of Stripe’s Tempo.
“The defining feature that separates crypto from the systems it aims to displace is its
permissionless nature. Period,” he emphasized.
He asserts that this is why Stripe’s Tempo is fundamentally flawed from the outset.
“The problem with corporate chains, like Tempo, isn’t code; it’s incentive. Once they control a
captive market, they’ll inevitably be tempted to skew the field,” he explained.
If Stripe, along with other fintech corporations, achieve success in creating exclusive,
controlled blockchains, the result would not be financial progress, but rather, a rearrangement
of corporate monopolies, he warned.
“We would effectively be exchanging an established hierarchy of card networks and existing
financial institutions for a new hierarchy consisting of fintech giants,” he stated.
Meta’s difficult experiences demonstrate how deeply ingrained financial and political structures
respond when technology companies try to centralize financial control. Stripe, according to
Catalini, is likely to initiate the same adversarial reaction.
“Open, permissionless networks are the only true way forward. Anything else is destined to fail,”
he concluded.
Stripe hasn’t yet responded to the request for comment.
Crypto market movers
- Bitcoin has increased by 0.5% in the past 24 hours, trading at $111,826.
- Ethereum’s trading remains unchanged at $4,306.
What we’re reading
Lance Datskoluo is DL News’ Europe-based markets correspondent. Got a tip? Email at lance@dlnews.com.