As everyone obsesses over Tempo's design decisions, CT is once again missing the forest from the trees Tempo provides Stripe with the final piece to build out their own payments network to compete directly with Visa and other card networks Today’s payment networks are made up of four key stakeholders, each taking their cut of the net economics: - Issuing banks - Acquiring banks - Card networks - Payment processors Interestingly, crypto infra maps quite elegantly onto the traditional payments stack Stablecoin issuers look a lot like digital issuing banks - they issue tokens backed by user funds in yield-bearing assets Wallets look a lot like acquirers - they provide infrastructure for merchants to accept stablecoin payments natively Orchestrators look a lot like payment processors - they handle routing, compliance, and fraud prevention Blockchains look a lot like card networks - they serve as a credibly-neutral asset ledger that connects each respective layer If you were to rebuild the payments stack from first principles, it would probably look something like a blockchain-native payment network that vertically integrates each respective layer on-chain Stripe clearly understands this Through their strategic acquisitions, they now own (1) the orchestration and issuance layer through Bridge (most don’t know this but Bridge also has their own stablecoin called USDB) (2) wallet infra through Privy and (3) blockchain rails themselves through Tempo In other words, Stripe has all of the necessary tools to build its own integrated payments stack that recaptures value at each layer. The margins of banks, card networks and processors become Stripe’s opportunity Perhaps most importantly, Stripe is uniquely positioned to execute given they already own the merchant relationship as a traditional processor Intuitively it also makes sense that they are initially structuring the network as a consortium of entities like Coupang, DoorDash, OpenAI, Anthropic and others In a world where e-commerce platforms and chat interfaces increasingly own the end user relationship, these platforms become the new linchpin to disrupting Visa and traditional payment networks I'm sure Stripe will initially play nice with Visa and existing banks so they can remain backwards compatible as they initially scale the network However, as more merchants, e-commerce platforms and ai companies join the network, network effects will slowly reach escape velocity, positioning Stripe to completely circumvent Visa and reduce their reliance on banks At scale, this will make it extremely difficult for Visa and other card networks to compete as their modularity inherently leaves less value for them to share with network participants

There are many first-principle truths that exist outside of the crypto-native bubble One of those truths is that institutions will never transact on public blockchains in the absence of enshrined privacy There are actual regulatory requirements around client data confidentiality and compliance reporting that literally make it a non-starter for any credible enterprise or institution The counter to this is that Blackrock and Franklin Templeton are already using Ethereum and Solana today The reality is these institutions are simply using blockchains as a distribution mechanism for products like BUIDL and BENJI to advance their principal goal – grow AUM and clip more fees They themselves are not moving any of their operations on-chain In the absence of optional privacy, blockchains look more like marketing vehicles than backend infra for institutional finance

There are many first-principle truths that exist outside of the crypto-native bubble One of those truths is that institutions will never transact on public blockchains in the absence of enshrined privacy There are actual regulatory requirements around client data confidentiality and compliance reporting that literally make it a non-starter for any credible enterprise or institution The counter to this is that Blackrock and Franklin Templeton are already using Ethereum and Solana today The reality is these institutions are simply using blockchains as a distribution mechanism for products like BUIDL and BENJI to advance their principal goal – grow AUM and clip more fees They themselves are not moving any of their operations on-chain While less popular in the CT bubble, I have a lot of respect for projects like Canton who actually understand what institutions need and have built their chain accordingly from first-principles