Financial technology giant Stripe, collaborating with investment firm Paradigm, has introduced Tempo. Tempo is a new blockchain network, specifically designed as a layer-1 solution aimed at facilitating swift and efficient stablecoin transactions.
The announcement, shared by Paradigm’s founder Matt Huang on September 4th, confirmed previous rumors. Speculation arose after Stripe briefly posted, then removed, blockchain engineering positions back in August. See Matt Huang’s announcement.
Currently in Private Testing
Tempo is currently being tested in a private network environment. Select partners are evaluating its performance in areas like international payments, business-to-business transactions, and remittance services.
According to Huang’s statement, the network is built to be compatible with the Ethereum Virtual Machine (EVM). This blockchain is designed to support high-volume payment scenarios. It provides low, predictable transaction costs, supports any stablecoin through a built-in automated market maker, and offers specialized user-friendly features.
Tempo can handle more than 100,000 transactions per second. It provides near-instant transaction finality by utilizing a specific payment channel. This separates everyday transactions from complex smart contract operations, improving speed and efficiency.
Key partners involved in the design and testing of Tempo include companies such as Anthropic, Coupang, Deutsche Bank, DoorDash, Lead Bank, Mercury, Nubank, OpenAI, Revolut, Shopify, Standard Chartered, and Visa.
These collaborations represent a diverse group. They include traditional banks, modern digital banks, e-commerce platforms, and companies focused on artificial intelligence.
Visa’s chief product and strategy officer, Jack Forestell, commented on the partnership:
The Crypto Investor Blueprint: A 5-Day Course On Bagholding, Insider Front-Runs, and Missing Alpha
“The future involves multiple chains: stablecoins will function across various blockchain networks. Visa is committed to creating interoperability between these chains and different stablecoin brands.”
Focus on Stablecoin Agnosticism
Tempo is designed to be “stablecoin neutral.” Any organization can create their own stablecoins. Plus, any stablecoin can be used for payments or to cover transaction fees (gas). This differs from networks that prefer specific stablecoins or require native tokens for fees.
A built-in automated market maker allows for easy conversions between various stablecoins. The network also supports optional privacy features for transactions and includes compliance tools designed to meet regulatory requirements.
These capabilities address concerns from businesses about transaction privacy. At the same time, it maintains compliance with regulations around anti-money laundering (AML) and know-your-customer (KYC) policies.
The blockchain is designed for real-world payment applications. It includes global payouts, integrated financial accounts, rapid remittances, tokenized deposits for continuous settlements, microtransactions, and automated payments.
Tempo leverages Reth as its foundation, ensuring compatibility with the EVM. It’s specifically optimized for payment functionalities. Independent entities, including the design partners, will operate the validator nodes before the network transitions to a permissionless model.
Stripe is joining Circle in launching a layer-1 network focused on payments using stablecoins. On August 12th, Circle announced Arc, a multi-chain infrastructure aimed at streamlining stablecoin transactions.
Tempo is positioned to work alongside existing general-purpose blockchains. It isn’t meant to compete directly with established layer-1 networks.