Stripe’s blockchain initiative, Tempo, has successfully raised $500 million in a Series A funding round led by Greenoaks and Thrive Capital, giving the payment-centric network a valuation of $5 billion, as reported by Fortune.
Sequoia Capital, Ribbit Capital, and Ron Conway’s SV Angel also participated in the funding round, while Stripe and Paradigm chose not to provide additional funding, according to a source familiar with the deal.
This announcement comes less than two months after Stripe, the global payments and fintech powerhouse, revealed its plans for a new layer-1 blockchain in collaboration with Paradigm, a venture firm focused on crypto and Web3 investments.
On September 4, Stripe CEO Patrick Collison shared on X, “as the adoption of stablecoins (and crypto in general) expands across Stripe, Bridge, and Privy, we realized that current blockchains don’t cater effectively to these needs.”
“We see Tempo as the payments-centric L1, designed for high-scale, real-world financial applications,” he added.
Although a launch date for Tempo is yet to be announced, Paradigm’s Chief Technology Officer Georgios Konstantopoulos mentioned on Friday that the core team from its open-source projects at Ithaca would join Tempo to assist in developing the blockchain’s payments infrastructure and scaling engineering efforts.
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A competitive stablecoin market
While Stripe has yet to disclose any plans for a native Tempo token, the blockchain’s emphasis on payments infrastructure places it in direct competition with various stablecoin issuers already integrated into global payment systems.
One notable competitor will be Circle, the issuer of USDC (USDC), a stablecoin pegged 1:1 to the US dollar, which is partnered with Mastercard and Visa. USDC, which launched in 2018, currently holds a market cap of $75.6 billion, second only to Tether’s USDt (USDT).
In August, Circle announced plans to launch a layer-1 blockchain by the end of this year to provide an “enterprise-grade foundation” for stablecoin payments, capital market applications, and foreign exchange.
Much of the recent activity in the stablecoin market has been influenced by the passage of the GENIUS Act in the US. This legislation was approved in July to establish federal guidelines for stablecoin issuers.
Moreover, stablecoins tied to the euro are gaining traction, as the European Union seeks to compete with US dollar-backed tokens.
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