Stripe and Paradigm have launched the public testnet for Tempo, a new blockchain designed for stablecoin payments. This marks a significant step towards a dedicated payment rail optimized for real-world stablecoin use cases. The testnet went live on Tuesday, inviting companies to build stablecoin payment applications on the network.
Tempo aims to provide a more efficient and reliable infrastructure for stablecoin transactions compared to general-purpose blockchains. Traditional blockchains mix payments with other activities like trading and NFT minting, leading to congestion and high fees. Tempo separates payment traffic, ensuring stable, low fees even during periods of high network activity. The target transaction fee is just one-tenth of a cent ($0.001).
The project was initially announced in September and is a collaboration between Stripe, a major player in online payments, and Paradigm, a Web3 venture firm. Tempo uses a Layer-1 blockchain that guarantees block space for payments at the protocol level. This ensures that payments are not affected by other network traffic.
Several major companies are already involved in testing and developing on the Tempo network. Initial partners included Deutsche Bank, Nubank, OpenAI, and Anthropic. Since then, UBS, Cross River Bank, and prediction markets platform Kalshi have joined as partners. Other partners include DoorDash, Shopify, Standard Chartered, Visa, Brex, Coastal, Deel, Faire, Figure, Gusto, Klarna, Mastercard, Payoneer, Persona, and Ramp.
Matt Huang, Paradigm's co-founder and the project lead for Tempo, noted the challenges developers face when navigating the crypto ecosystem. He stated that Tempo aims to close the developer experience gap for those considering real-world stablecoin applications. Stripe's President of Technology and Business, William Gaybrick, mentioned earlier this year how memecoin launches had previously disrupted payroll processors using stablecoin rails.
Tempo is designed to accept any U.S. dollar-denominated stablecoin for fees, including USDT and USDC. This removes the need to hold a specific native token for transaction costs. Analysts at Citigroup estimate that the stablecoin supply could reach $3.7 trillion by 2030 if crypto continues to integrate with traditional finance. However, they also cautioned that regulatory hurdles or unresolved security issues could limit the supply to around $500 billion.
Tempo's architecture includes an enshrined Automated Market Maker (AMM), enabling users to pay transaction fees in any supported stablecoin. The blockchain is also designed to be EVM compatible and integrated with ISO 20022 standards to ensure interoperability with existing financial systems.
The launch of Tempo's public testnet is a significant development in the stablecoin space, offering a dedicated and efficient platform for real-world payments. It addresses the limitations of existing blockchain infrastructure and aims to facilitate the wider adoption of stablecoins for various use cases, including microtransactions, payroll, and remittances.
