Payments infrastructure company Stripe is moving into the blockchain, according to Forbes, which uncovered a job posting regarding the move. According to the posting, Stripe is planning to launch a payments blockchain called Tempo.
“Tempo is a high-performance, payments-focused blockchain,” the advertisement on the Blockchain Association’s website said. Here’s a look at five things that matter about Stripe’s move, including details about the new blockchain, why it’s launching it now, how it fits into the company’s strategy, what it means for the wider industry, and what’s still unknown.
What is Tempo?
Tempo is a Layer 1 blockchain built from the ground up (as opposed to a fork). A Layer 1 blockchain is the base network in a blockchain ecosystem. It serves as the foundational layer where transactions are processed, validated, and recorded. With Tempo, Stripe is optimizing the network for payments and making it compatible with Ethereum Solidity toolchains, meaning that developers can use the same set of familiar tools they use for Ethereum.
Tempo was built stealthily by a small team of around five people in partnership with crypto VC firm Paradigm. Until the job posting, which was dated August 3, the new project operated under the radar.
Why now? Stripe’s crypto build-out strategy
Launching its own blockchain is Stripe’s latest move into the crypto industry. Stripe has been steadily entering the crypto world, from its acquisition of stablecoin platform Bridge for $1.1 billion, to buying wallet developer Privy in June. Since then, Stripe has also made a non-crypto acquisition, acquiring payment orchestration company Orum in June. Launching Tempo will add the final piece of this equation. Owning its own blockchain rails will give Stripe full control of the payment flow, from the wallet to the payment settlement.
The benefits of building its own blockchain
As with all of its acquisitions, Stripe’s move to create a blockchain from scratch is strategic. Launching Tempo will offer it full-stack control, which will allow Stripe to optimize network speed, lower fees, and integrate with other stablecoins and wallets. Additionally, the custom payments blockchain could displace legacy systems like SWIFT or even FedNow, with faster, cheaper rails. And since Tempo will be compatible with Ethereum it is developer friendly, which means that it will not require new tools or talent to align with its infrastructure.
Bigger implications for payments & crypto
Stripe has been operating in the fintech arena since 2010. With its own blockchain, the company could accelerate mainstream adoption of stablecoins and blockchain payments via a merchant network. The move showcases how traditional fintechs are taking steps to operate in the crypto space. Not only this, but it is also indicative of a new competitive landscape in which fintechs control their own payments rails, disrupting traditional ecommerce and cross-border transactions.
What We Still Don’t Know
Even though it is interesting to speculate on the impacts Tempo will have across the industry, there is still a lot we do not know. Much of this is because the news originated from a job posting, not an official company announcement. Details such as whether Tempo will come with its own native token, how it will be governed, and a clear timeline for the launch are still unknown.
What is clear, however, is that it is worth keeping an eye on Stripe not just as a payments innovator, but also as a player in the crypto arena going forward.
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