Ethereum News Today: Stripe and Paradigm Build a Blockchain to Fix Stablecoin Payments' Speed and Cost Problem

Stripe and Paradigm have officially launched Tempo, a payments-first blockchain designed to support scalable stablecoin transactions across global financial systems. The initiative, incubated within Stripe and developed in collaboration with Paradigm, aims to address the limitations of existing blockchains in handling high-volume, real-world financial applications. Stripe CEO Patrick Collison emphasized that current blockchain infrastructure, even high-speed networks like Solana, fails to meet Stripe’s throughput and usability requirements for stablecoin payments. Tempo is intended to process up to 100,000 transactions per second with sub-second finality, a critical feature for global payments, remittances, and microtransactions.

Tempo’s architecture allows gas fees to be paid in stablecoins rather than native blockchain tokens, aligning with Collison’s vision for payments systems that use fiat-denominated fees. This feature is designed to improve user experience by eliminating the volatility typically associated with blockchain-native currencies. The network also integrates an automated market maker to ensure neutrality across stablecoin issuers. Built using the Ethereum Virtual Machine (EVM) and the Reth execution client, Tempo is EVM-compatible, facilitating seamless integration with existing DeFi and Ethereum-based tools. Paradigm CEO Matt Huang, who will lead the Tempo team alongside his ongoing role at Paradigm, stated that the project is being built with principles of decentralization and neutrality in mind. A diverse set of initial validators is planned, with a transition to a permissionless model in the future [1].

The project has attracted high-profile partners, including Anthropic, Deutsche Bank, Nubank, OpenAI, Revolut, Shopify, and Visa, all of whom are expected to shape the blockchain’s development. Stripe’s global customer base provides a unique advantage, offering an established distribution network that could accelerate adoption. Huang noted that the goal is for Tempo to remain neutral and open to broader usage beyond Stripe’s ecosystem. The chain is currently in private test mode, with no official launch date yet announced [2].

The emergence of Tempo marks a significant shift in the blockchain landscape, challenging the dominance of Ethereum and its layer 2 (L2) scaling solutions in the stablecoin payments market. Tempo was initially speculated to be an Ethereum L2 but has evolved into a standalone layer 1 (L1) network. This strategic decision reflects concerns among industry observers that existing L2s fail to meet the scalability and user experience needs of real-world financial applications. Tushar Jain, co-founder of Multicoin Capital, described the move as bearish for L2s, while Jon Charbonneau, a crypto investor, suggested that large players like Stripe are increasingly building their own L1s rather than relying on Ethereum as a settlement layer. The sentiment was echoed by Chuk Okpalugo of Paxos, who highlighted Tempo’s strong features, partnerships, and permissionless ethos as key strengths despite potential coordination challenges [1].

Stablecoins, now a $270 billion market, are projected to grow into a trillion-dollar asset class as they offer faster and cheaper alternatives to traditional banking systems like SWIFT. Tempo is positioned to capture a share of this growing market by addressing bottlenecks in transaction speed and cost. The blockchain’s design also includes support for AI agent payments, a use case that crypto advocates argue will be central to the future of decentralized finance. Paradigm emphasized in its announcement that Tempo is not intended to compete with Ethereum but rather to complement it by serving a specific niche in payments and stablecoin infrastructure. The firm also highlighted the potential for Tempo to serve as a bridge for large enterprises entering the blockchain space, increasing the adoption of onchain tools and infrastructure [3].

Source: [1] 'End of L2s?' Stripe's Tempo debut challenges Ethereum's scaling vision (https://ambcrypto.com/end-of-l2s-stripes-tempo-debut-challenges-ethereums-scaling-vision/) [2] Stablecoin News: Stripe, Paradigm Unveils Payments Blockchain (https://www.coindesk.com/business/2025/09/04/stripe-paradigm-unveil-tempo-as-blockchain-race-for-high-speed-stablecoin-payments-heats-up) [3] Stripe and Paradigm announce new payments-focused blockchain (https://fortune.com/crypto/2025/09/04/stripe-paradigm-tempo-blockchain-stablecoins-matt-huang-payments)