Two of Silicon Valley’s top tech firms are teaming up to change the payments landscape. On Thursday, the $91.5 billion fintech Stripe and the crypto venture firm Paradigm publicly announced their joint project Tempo, a so-called Layer-1 blockchain built around stablecoins, or cryptocurrencies typically pegged to the U.S. dollar.
Layer-1 blockchains like Bitcoin or Ethereum are more demanding to build and operate than “Layer 2s,” which sit atop other blockchains. Tempo is among a new crop of layer-1 projects dedicated to stablecoins, along with Circle’s Arc and Tether’s Plasma and Stable.
The long-rumored blockchain comes amid a crypto boom. The Trump administration’s embrace of the sector and Congress’s passage of a stablecoin-focused bill in July have spurred many larger companies previously skeptical of blockchain technology, from banks to Big Tech companies, to begin exploring the space. But Stripe has been a pioneer, especially in Silicon Valley, including making landmark acquisitions of two stablecoin and crypto wallet companies.
By helping build a blockchain alongside Paradigm — whose managing partner and Stripe board member Matt Huang will lead the project — Stripe is doubling down on its crypto bet as the future of global payments.
Blockchains, or distributed ledgers that record transactions, have served as the foundation for crypto technology since the introduction of Bitcoin in 2008. The list of available options has proliferated, from mainstay layer-1 offerings like Ethereum and Solana to new generations built on top of old ones. Many have received hundreds of millions of dollars in funding but faded amid a lack of usage.
While some like Ethereum are focused on building decentralized financial applications, a new slate of payment-focused blockchains has emerged over the past year in conjunction with the rise of stablecoins. These promise to process lightning-fast transactions with minimal fees, often built around native tokens, such as Circle’s stablecoin USDC or the market leader Tether, which are often traded on Ethereum but deployed on many other blockchains as well.
Stripe and Paradigm will launch their own blockchain amid this heightened competition. Still, Tempo will have the advantage of Stripe’s built-in customer base, with the startup serving as one of the world’s largest payment infrastructure companies and catering to clients who, for the most part, don’t operate in the crypto realm. Stablecoin proponents have long touted the technology as faster and more efficient than legacy money transfer services like SWIFT and wire transfers, which can be slow and costly. At the same time, adoption has been slowed by companies’ hesitance toward crypto and the uncertain regulatory landscape.
