In a recent discussion, Christian Catalini, co-creator of Facebook’s Libra project, expressed significant concerns regarding the commercial viability of Stripe’s Tempo and Circle’s Arc, suggesting that their success may come at the expense of the core ideal of decentralization inherent in cryptocurrency. Launched in 2019, the Libra initiative aimed to create a global digital currency backed by a diverse range of stable assets, striving to make financial transactions as seamless as messaging. However, the project faced immediate backlash from regulators who were apprehensive about financial sovereignty, systemic risks, and user privacy.
By 2022, Libra, which had been rebranded as Diem in an effort to reshape its public image, was ultimately discontinued, with its assets sold off. Catalini, who served as the chief economist for the Libra project, revisited its early compromises in a recent thread on X. He underscored the importance of these compromises in the current landscape of cryptocurrency and blockchain technology.
One of the significant setbacks for Libra was the abandonment of non-custodial wallets, as regulators demanded a “clear perimeter” that included a responsible intermediary who could be contacted and held accountable in the event of issues. Catalini noted that for regulators accustomed to intermediated finance, a framework where users had complete control over their funds was simply unmanageable. He remarked,
“For them, killing self-custody wasn’t a choice; it was an obvious necessity.”
Interestingly, Catalini pointed out that today’s open networks are developing native compliance tools for blockchain that could address regulatory concerns more effectively than traditional financial frameworks. However, during the Libra project, the need to conform to regulatory demands led to a stripping away of decentralization, which Catalini described as an early indicator of the trajectory of corporate-led blockchain projects.
In this context, Catalini positioned Stripe’s Tempo and Circle’s Arc as potential continuations of this trend. Both projects are new blockchain initiatives explicitly designed for payment processing and are marketed as stablecoin-first infrastructures for enterprises and financial technology companies. Circle’s Arc, launched on August 12, 2025, is presented as a Layer-1 network tailored for stablecoin finance, utilizing USDC for fees and integrating a foreign exchange engine, promising rapid transaction finality and optional privacy features. It aims to facilitate cross-border payments, on-chain credit systems, tokenized capital markets, and automated payments.
On the other hand, Stripe and Paradigm introduced Tempo on September 4, 2025, highlighting its capacity to handle over 100,000 transactions per second. Tempo is EVM-compatible, with a dedicated payments lane that allows users to pay transaction fees in any stablecoin, positioning it as a robust player in the payments landscape. Stripe has already partnered with notable companies such as Visa, Deutsche Bank, and Shopify in its early design phase.
Despite the promising features of these platforms, Catalini raised a critical point about the implications of corporate-led blockchains like Arc and Tempo. He cautioned that instead of displacing traditional financial institutions, these initiatives might simply replace them with fintech giants, leading to a similar structure of dominance. He stated,
“The throne will have new occupants, but it will be the same throne.”
Furthermore, he predicted that such networks would likely fracture along geopolitical lines, resulting in competing financial powerhouses rather than the unified, borderless system envisioned by early advocates of cryptocurrency. Ultimately, Catalini characterized Stripe’s Tempo as a “referendum on the ghost of Libra,” suggesting that if it thrives, it could indicate that Libra’s failure was due to timing rather than design, revealing a shift towards more centralized solutions in the realm of open, permissionless money.
For further insights on this evolving landscape, you can visit the original article on CoinDesk.
