Stripe and Circle Make Major Blockchain Moves: Tempo for Stablecoins and Arc Acquisition
Payments giant Stripe, in partnership with crypto investment firm Paradigm, has officially unveiled Tempo, a new blockchain designed for high-speed stablecoin payments. Concurrently, stablecoin issuer Circle has acquired Malachite, the consensus engine for its upcoming Arc blockchain, signaling a significant push in the stablecoin infrastructure race.
Tempo: Stripe and Paradigm's Stablecoin Solution
Stripe and Paradigm have launched Tempo, a blockchain project incubated within Stripe, aimed at facilitating global payouts, microtransactions, and AI-driven payments. The network is engineered to handle tens of thousands of transactions per second with sub-second finality, a significant leap from existing high-speed blockchains. Stripe CEO Patrick Collison highlighted that current blockchains, even those like Solana, do not meet Stripe's throughput requirements for payment-focused applications.
- Key Takeaways:
- Tempo targets 100,000 transactions per second with sub-second finality.
- Fees can be paid in stablecoins, not just native tokens.
- It features a built-in automated market maker for issuer neutrality.
- Tempo is EVM-compatible and built on the Reth Ethereum execution client.
- Major partners include OpenAI, Visa, Shopify, and Deutsche Bank.
Collison explained that businesses are increasingly turning to stablecoins for their speed, lower costs, and reliability compared to traditional payment systems. He emphasized that adoption is driven by solving real-world financial friction, not speculative benefits or regulatory arbitrage, especially with stablecoins now regulated in major markets.
Circle Acquires Malachite for Arc Blockchain
In a separate but related development, Circle, the issuer of the USDC stablecoin, has acquired Malachite from Informal Systems. Malachite is the consensus engine that will power Circle's forthcoming blockchain, Arc. This acquisition includes the underlying technology and intellectual property, with nine employees from Informal Systems joining Circle.
Malachite, built on the Tendermint consensus algorithm, is designed for flexibility, correctness, performance, and security in decentralized systems. It will remain open-source under the Apache 2.0 license, allowing developers to utilize and extend the technology. This move by Circle is part of a broader trend of stablecoin issuers developing their own blockchains to capitalize on the rapidly growing stablecoin market, which is projected to reach a trillion dollars and disrupt global payment flows.