The news: Stripe is developing a blockchain called Tempo with crypto venture capitalist Paradigm, per an exclusive from Fortune.

How we got here: Stripe has been gearing up to get deeper into crypto with key partnerships and acquisitions. 

• It acquired stablecoin platform Bridge for $1.1 billion last October and crypto wallet Privy for an undisclosed amount in June. 
• It also partnered with Ramp to issue corporate cards backed by stablecoins that can pay out in fiat.

Why Tempo matters: A proprietary, payments-focused blockchain would give Stripe full control over the tech stack propping up its burgeoning stablecoin business. 

Operating a blockchain lets Stripe collect more fees from transactions—even when the transactors aren’t Stripe customers.

Industry movement: Circle has also made strides into the crypto blockchain arena, debuting Arc, its proprietary Layer-1 blockchain for stablecoin finance. 

As a stablecoin issuer, it still lacks its own blockchain where it can process and charge fees for money movement. Like Stripe, Circle wants to grow the infrastructure that makes its product more profitable.

Our take: Even after the completion of its ecosystem, Stripe still faces steep competition with a crowd of existing public and private blockchain networks. 

To combat this, Stripe could try to diversify its blockchain use by expanding its services beyond payments with data-link layer protocols, which can enable smart contracts and enhance digital security.

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