Christian Catalini, one of the architects of Facebook’s Libra (later Diem), says the launches of Stripe’s Tempo and Circle’s Arc are a test of whether crypto will repeat Libra’s compromises — trading decentralization for regulatory comfort and faster adoption.
Libra was conceived in 2019 as a global stable digital currency backed by a basket of assets, promising payments as simple as messaging. Regulators quickly pushed back, and what began as an open design was narrowed through negotiations until key decentralizing features — notably true non‑custodial wallets — were removed. Those early concessions, Catalini argues, set a template for corporate‑led projects that prioritize an accountable counterparty over user self‑custody.
Catalini laid out his concerns in a public thread, noting regulators wanted a clear, reachable entity they could hold responsible. In his words, “As long as there is a single throat to choke — or a committee of them — you can’t truly rewire the system.” That trade‑off solved immediate regulatory questions but buried the experiment in permissioned control.
What’s new: Circle’s Arc is a Layer‑1 built around USDC fees, sub‑second finality, an FX engine and opt‑in privacy — explicitly marketed for stablecoin finance. Tempo, launched by Stripe with Paradigm, is an EVM‑compatible, payments‑first chain that lets participants pay gas and transactions in stablecoins and includes a dedicated payments lane. Both target banks, fintechs and merchants aiming to move fiat‑like payments onchain.
That positioning is commercially sensible: lower volatility for fees, familiar rails for institutions and clear integration points for incumbents. But Catalini warns the outcome could be a familiar one — the old financial system rebuilt with new corporate gatekeepers. Instead of disrupting card networks and banks, these chains could elevate fintech platforms and large corporate validators to the same centralized roles crypto originally sought to displace.
Why readers should care: If Tempo or Arc scale, they may win mainstream adoption — and with it, influence over payments policy, compliance, and user data flows. Expect geopolitical fragmentation (competing corporate stacks across jurisdictions), pressure on self‑custody models, and debates over onchain compliance tools versus intermediated control.
Watch governance models, custody options, and which firms become validator or operator partners. Those details will show whether these networks are evolutionary compromises or a re‑centralization of finance under new names.
Source: CoinDesk. Read the original coverage for full details.
