How Stripe’s Tempo and Circle’s Arc Fail the Decentralization Test, Explains Libra Co-Creator
The New Kings of Crypto? Or Just New Gatekeepers?
The world of crypto payments is heating up. Financial technology giants Stripe and Circle have thrown their hats into the ring, launching their own purpose-built blockchains, Tempo and Arc. Hailed as the next step in mainstreaming stablecoin payments, these platforms promise unparalleled speed, efficiency, and enterprise-grade features. But as the hype builds, a voice from the past offers a stark warning.
Christian Catalini, a co-creator of Meta’s ill-fated Libra project, argues that these corporate-led chains may be doomed to repeat history. While they might achieve commercial success, he suggests they do so by sacrificing the very principle that makes crypto revolutionary: decentralization. Are we witnessing the dawn of a new, efficient financial system, or are we just watching new gatekeepers build a more modern throne?
A Cautionary Tale: The Ghost of Libra
To understand the warning, we have to look back at Libra. Launched by Facebook in 2019, it was an audacious plan to create a global digital currency. The goal was to make sending money as easy as sending a message. However, the project immediately ran into a wall of regulatory opposition. Governments and central banks feared losing financial sovereignty, creating systemic risk, and compromising user privacy.
Catalini, who served as Libra’s chief economist, revealed a critical compromise made during those early days. The original vision included non-custodial wallets, allowing users to truly own and control their funds. But regulators demanded a “clear perimeter”—a person or entity they could hold responsible if things went wrong.
“For them, killing self-custody wasn’t a choice, it was an obvious necessity,” Catalini explained. This forced retreat from decentralization was a sign of things to come. By 2022, Libra, renamed Diem, was officially dead.
The lesson was clear: “As long as there is a single throat to choke — or a committee of them — you can’t truly rewire the system,” Catalini stated. “Worse, any network with an architect is living on borrowed time.”
The New Contenders: Meet Tempo and Arc
This is the context in which Stripe’s Tempo and Circle’s Arc have emerged. Both are Layer-1 blockchains designed from the ground up for payments, aiming to solve the speed and cost issues that plague existing networks.
Circle’s Arc
Launched in August, Arc is a network built for stablecoin finance. It eliminates volatile gas fees by using USDC for transactions, offering predictable, dollar-denominated costs. It boasts features like a built-in foreign exchange engine, sub-second finality, and opt-in privacy, targeting use cases from cross-border payments to tokenized capital markets.
Stripe’s Tempo
Unveiled in September by Stripe and venture capital firm Paradigm, Tempo is a payments powerhouse. It claims to handle over 100,000 transactions per second and is compatible with the Ethereum Virtual Machine (EVM). It features a dedicated payments lane and allows users to pay for transactions in any stablecoin. Its list of early design partners is a who’s who of tech and finance, including Visa, Deutsche Bank, Shopify, and OpenAI.
Déjà Vu: Are We Rebuilding the Same System?
While impressive, these projects ring alarm bells for Catalini. He argues that by building centralized, corporate-controlled networks, Stripe and Circle aren’t displacing the old financial order—they’re simply replacing it.
Instead of disrupting banks and card networks like Visa and Mastercard, these fintech giants could elevate themselves to the same position of dominance. In Catalini’s poignant words, “The throne will have new occupants, but it will be the same throne.”
He also predicts these systems will inevitably fracture along geopolitical lines. It’s unlikely that Western and Eastern economic blocs would agree to run their financial infrastructure on a single corporate network. The result would be competing financial empires, not the truly borderless, open system that early crypto pioneers envisioned.
A Referendum on the Ghost of Libra
Ultimately, Catalini sees the launch of Stripe’s Tempo as a “referendum on the ghost of Libra.” If Tempo succeeds where Libra failed, it might suggest that Libra’s design wasn’t the problem—its timing was. It could prove that the market, and the regulators who oversee it, prefer pragmatic, centralized solutions over the radical openness of permissionless money.
The rise of Tempo and Arc presents a critical question for the future of finance. Is the path to mass adoption paved with compromises on decentralization? Or is this a betrayal of the core ethos that promises to create a more equitable and open financial world for everyone? As these new titans rise, the battle for the soul of crypto is just beginning.
