Stripe’s blockchain project, Tempo, has successfully raised $500 million in a Series A funding round led by Greenoaks and Thrive Capital, achieving a valuation of $5 billion. This funding takes place less than two months following the unveiling of Tempo, which is designed for stablecoin and real-world payments.

Other notable participants in this funding round included Sequoia Capital, Ribbit Capital, and Ron Conway’s SV Angel, though Stripe and Paradigm opted not to invest additional capital, according to insiders at the deal.

Less than two months ago, Stripe, a leader in global payments and fintech, announced its intentions for this new layer-1 blockchain in conjunction with Paradigm, a venture capital entity focusing on crypto and Web3 startups.

On September 4, Stripe’s CEO Patrick Collison stated on X:

“As the use of stablecoins (and crypto more broadly) grows across Stripe, Bridge, and Privy, we found that existing blockchains are not optimized for them.” Translation: Patrick emphasized the challenges in utilizing existing blockchains for stablecoin transactions.

He also claimed:

“We think of Tempo as the payments-oriented L1, optimized for high-scale, real-world financial applications.” Translation: Tempo is aimed at providing efficient financial solutions on a large scale.

While no specific launch date for Tempo has been announced, Georgios Konstantopoulos, CTO at Paradigm, mentioned that the core team from Ithaca would be joining Tempo to aid in developing the blockchain’s payment infrastructure and enhance engineering capabilities.

A Competitive Market for Stablecoins

Stripe has not released plans for a dedicated Tempo token, but its emphasis on payment infrastructure will pit it against several existing stablecoin issuers already integrated into global payment systems.

For instance, Circle issues USDC, a stablecoin tied 1:1 to the US dollar, which is already integrated with Mastercard and Visa. USDC, launched in 2018, currently boasts a market capitalization of $75.6 billion, lagging only behind Tether’s USDT. In August, Circle spotlighted its plans to introduce a layer-1 blockchain by the year’s end, aimed at supporting robust environments for stablecoin payments and capital market applications.

Much of the recent growth within the stablecoin sector can be attributed to the GENIUS Act, enacted in July, establishing federal regulations for stablecoin issuers. Furthermore, stablecoins pegged to the euro are gaining traction as the European Union seeks to rival US dollar-linked tokens.