Tempo, a startup that plans to launch a blockchain optimized for stablecoin transactions, has reportedly raised $500 million in funding.

Fortune today cited sources as saying that the Series A round values the company at $5 billion. Greenoaks and Thrive Capital reportedly led the raise. They were joined by Sequoia, Ribbit Capital and SV Angel.

The round comes less than two months after Tempo was launched by Stripe Inc. and Paradigm, a venture capital firm focused on the crypto sector. Paradigm co-founder Matt Huang is Tempo’s chief executive. 

Many crypto transactions are carried out using stablecoins, digital assets pegged to a fiat currency. Their popularity stems partly from the fact that they offer lower volatility than other cryptocurrencies. Most stablecoin transactions are processed via the Ethereum blockchain.

Tempo positions its upcoming blockchain as an alternative to Ethereum. According to Stripe, the latter technology can currently process about 20 transactions per second. Tempo plans to equip its blockchain with the ability to complete 100,000 transactions per second, which the company says will make it more suitable for payment processing use cases. 

Ethereum ships a software module known as EVM that enables developers to run applications on the blockchain. Tempo plans to provide EVMP compatibility, which will make it relatively simple to port Ethereum applications to its blockchain. It will also provide support for Reth, a software component originally written for Ethereum that developers can use to interact with blockchains.

Tempo plans to charge “near-zero transaction fees” from users. Additionally, it will support batching, the practice of combining multiple transactions into a single payment. Batching reduces transaction fees when a platform charges commissions on a per transaction basis.

The company’s website states that it will support multiple stablecoins. It will enable users to not only move those stablecoins via its blockchain but also use them to pay transaction fees. Certain existing blockchains require transaction fees to be paid in a platform-specific stablecoin, which creates more work for users. 

Tempo believes that its technology will lend itself to a wide range of use cases. The company sees financial technology startups embedding the blockchain into their applications to power payment features. Artificial intelligence agents, in turn, can use Tempo to make purchases on users’ behalf.

When Tempo launched last month, Stripe CEO Patrick Collision disclosed that the startup’s initial partner roster includes OpenAI and Anthropic PBC. That hints the two AI providers could add support for the blockchain to their respective AI agents. Tempo’s partner network also includes major financial institutions such as Standard Chartered. 

The company’s funding round comes weeks after crypto company Circle Internet Group Inc. debuted a competing blockchain called Arc. Similarly to Tempo, the technology is optimized to process stablecoin transactions.

Photo: Unsplash