What is Tempo? Stripe enters the blockchain aiming at the 2 trillion stablecoin market

What is Tempo? It is a Layer 1 blockchain jointly developed by the $90 billion fintech giant Stripe and top crypto venture Paradigm, designed specifically for stablecoin payments and traditional financial institutions. Its core innovations include dedicated payment channels guaranteeing transactions cost only one-tenth of a cent, the ability to pay gas directly with any USD stablecoin without native tokens, and built-in stablecoin DEX for automatic conversions.

Why does Stripe want to build its own blockchain? The three major pain points of existing public chains

The answer to what Tempo is begins with the real issues faced by Stripe. In September 2025, Stripe CEO Patrick Collison stated on X that “existing blockchains are not optimized” to support the booming use of stablecoins on their platform. In other words, current crypto rails cannot meet Stripe’s scale, so they decided to create a new one. Behind this decision are three core pain points.

The first pain point is unpredictable costs. On most blockchains, payment transactions, NFT minting, DeFi settlements, and high-frequency trading bots compete for block space. When NFT collections launch or popular protocols are active, transaction fees can spike 10x or even 100x, making payments economically infeasible. For companies that require stable budgeting, this volatility is a fatal flaw.

The second pain point is the complexity of native tokens. On Ethereum, you need ETH; on Solana, you need SOL. These tokens are highly volatile, with prices fluctuating 20% within a single day, making it difficult for businesses to budget costs and requiring users to hold multiple cryptocurrencies. If you are a company paying salaries in USDC, why do you still need to buy and manage ETH or SOL? This design increases accounting complexity and operational costs.

The third pain point is performance bottlenecks. Traditional bank transfers, especially international ones, usually take 3 to 5 business days. Although current public chains have significantly improved, delays or failures can still occur during peak times. Stripe needs a network that guarantees sub-second finality, ensuring each transaction is completed instantly and irreversibly.

Tempo is created to solve these three pain points. It is a blockchain built specifically for payments, incubated by Stripe and Paradigm, and is being spun off into an independent company led by Paradigm co-founder Matt Huang.

Three disruptive designs redefine stablecoin payments

The core answer to what Tempo is lies in three major innovative designs. The first is dedicated payment channels, which is Tempo’s most innovative feature. It provides guaranteed block space reserved specifically for protocol-level payment transactions. It’s like a high-speed highway with carpool lanes, ensuring that even if the regular lanes are congested, payment transactions won’t be delayed. No matter what other network activity occurs, fees remain predictably low, targeting one-tenth of a cent per transaction.

The second is native stablecoin gas fees. Tempo allows you to pay transaction fees directly with any supported USD-pegged stablecoin (such as USDC or USDT), eliminating the need to acquire, hold, or manage more volatile tokens for ease of payment. This greatly simplifies accounting, reduces operational complexity, and ensures cost predictability.

The third is an integrated stablecoin DEX. Tempo includes a native decentralized exchange optimized for stablecoins and tokenized deposits, enabling seamless conversions between different stablecoins. If you want to pay gas with USDT but validators prefer USDC, the protocol will automatically use DEX liquidity to convert. Users and enterprises can trade in their preferred stablecoins, while validators receive payments in their preferred stablecoin, all transparently handled by the protocol.

Three major differences between Tempo and existing public chains

Cost Structure: Fixed cost of 0.1 cents per transaction vs Ethereum’s peak gas fees of dozens of dollars

Token Requirement: Pay directly with stablecoins vs needing to hold volatile native tokens like ETH, SOL

Performance Guarantee: Dedicated payment channels ensure priority processing vs competing for block space with DeFi and NFT activities

Additionally, Tempo is compatible with the Ethereum Virtual Machine (EVM), allowing developers to use the same programming languages (Solidity), tools (Foundry, Hardhat), and frameworks as Ethereum. Existing smart contracts can be deployed on Tempo with minimal modifications. This compatibility lowers migration costs and enables Ethereum developers to easily build applications on Tempo.

Top institutional endorsements and current testnet status

Tempo has received support from a very prestigious lineup of institutions. In addition to core backing from Stripe and Paradigm, global giants such as Visa, Mastercard, OpenAI, Anthropic, Deutsche Bank, UBS, Shopify, Revolut, Nubank, DoorDash, and others have participated in its design. These companies serve hundreds of millions of users worldwide, and their involvement means Tempo has been designed with enterprise needs in mind from the start.

Notably, Stripe has invited these companies as “design partners” rather than mere investors. This means they are actively involved in the architecture of Tempo, ensuring its features meet real business scenarios. The participation of AI labs like OpenAI hints at preparing for future scenarios involving “AI agent payments.”

Tempo’s public testnet launched on December 9, 2025, and is open to developers worldwide. It currently supports running nodes, deploying smart contracts, creating custom stablecoins, testing payment flows, accessing testnet stablecoins, and exploring the built-in DEX. US Secretary of the Treasury Scott Bessent stated he sees stablecoins as a huge market opportunity, with a market cap potentially exceeding @E5@ trillion dollars. With backing from major institutions like Stripe, Tempo is widely regarded as one of the top competitors in the stable chain space.