Money Code

Is Tempo Stripe’s Libra 2.0? Trade-Offs in Building a Payments Blockchain w/ Simon Taylor

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In the inaugural episode of Money Code, hosts Chuk Okpalugo and Raj Parekh sit down with Simon Taylor — writer of Fintech Brainfood and now at Tempo, the new payments-focused Layer 1 incubated by Stripe and Paradigm. Simon shares his journey into blockchain, the cycles of innovation in TradFi, and why stablecoins are the “internet’s native money.” Together, they unpack Tempo’s vision, the trade-offs between neutrality and distribution, and the real-world use cases that could bring trillions in payments on-chain.


Simon Taylor:

Your job inside of a financial institution is to do just enough, to never give up your political capital, to be able to do the right thing when the time comes, and I think that regulation is the time that's come. Regulation is a big, big shift and eye-opening moment, and we've gone from financial institutions just talking about operating on closed networks to quietly coming on chain, and that is a Rubicon crossing moment.

Chuk Okpalugo:

Welcome to Money Code. It's the show where we decode stablecoins and the future of programmable money. I'm Chuck Okpalugo, your host and author of Stablecoin Blueprint, and I'm here with my co-host, Raj Parekh, head of stablecoins and payments at Monad. How are you doing today, Raj?

Raj Parekh:

I'm pumped. This is episode number one of Money Code. I'm excited to get into it.

Chuk Okpalugo:

Yes, yes, I'm so, so excited today because this is our first episode of Money Code and really really honored to have as our very first guest the great Simon Taylor. And if, for some reason, you don't know already who Simon is, he's been one of the leading experts in fintech and blockchain for over a decade, as far back as 2014, where he led blockchain R&D at Barclays. Since then, he's been a co-founder of Consultancy 11FS, head of strategy at Sardine, and he recently joined the new blockchain project, Tempo, backed by Stripe and Paradigm, which we'll get into today. He's also the writer of FinTech Brain Food, a leading industry newsletter, and hosted many podcasts over the years, like FinTech Insider, Blockchain Insider and now Tokenized. I've been listening to these shows for years, so it really feels like a full circle moment for me to have Simon here today. Usually he's the one asking the questions, but this time I get the privilege of asking him questions. So, Simon, thank you so so much for joining. How are you doing today?

Simon Taylor:

Thank you, Chuk, you are crushing it. My friend Raj, good to see you. I appreciate you guys for putting another show in the universe where people are trying to decode money, because it's the most fascinating subject on earth and once you scratch beneath the surface, it never works the way you think it should and I don't know. It kind of gets you, doesn't it?

Chuk Okpalugo:

It's so exciting. So first a quick disclaimer of course, the views and opinions of the hosts and guests are their own, and nothing we discussed today constitutes investment advice or any other form of advice. So with all that out of the way, let's dive in. So, simon, I don't think a lot of people know that you've been interested in blockchain technology for over a decade now and have spent even longer in payments. How did you get that first role at Barclays? Take us all the way back. Give us the Simon Taylor origin story. You then did consulting and podcasting.

Simon Taylor:

Nobody knows, yeah. So I actually started as a software engineer in a telco, writing code that took stuff that was appearing on the green screens from the mainframes and making that appear on the com, which, if you ever work in banking, turns out to be a really useful skill to have. So I left that in 2008 and joined a payments company, and this payments company was called TSYS- still is. They're still there. They are an issuer processor, so a bit like a Galileo, Marqeta or, if you're more crypto literate, even a Rain- right. They help banks issue their cards, the cards that you give to a customer. They'll run the mainframe for it, they'll produce all of that stuff, and that was a real lesson in how all of the infrastructure behind the scenes worked. I worked in everything from the data center to product to sales and really got my hands dirty with the underlying ISO messages and everything in between.

Simon Taylor:

Left that in 2013 to join Barclays and my first job there was actually in payments. So I was helping do some of the early mobile payments around the UK's instant payment network called Faster Payments. The guy sitting next to me was doing the SEPA implementation and we also had the team more broadly was doing all of the Swift work and ISO 20022 messages. So I was like in the thick of it, at the coalface, delivering payment stuff, and if I ever sound like I'm ranting and doing a weekly rant, it's because there were so many things that seemed obvious to me at the time, watching technology companies like Stripe emerging and I was just wanting to scream into a pillow that why aren't we doing this stuff? We could be doing this stuff. Surely that's the right answer. Shh, young man, you don't know how big banks really work and there was some good commercial reasons why they were saying that. But the point being, I always wanted to be the tech guy, but that was stuck inside a bank. Eventually, that sort of paid off. We helped set up something called Barclays Rise and that went on to do a partnership with Techstars. We invested in Alloy, Chainalysis, and then the CTO asked me if I could head a crypto R&D because my weekends, by day, I was the guy who worked at a bank. By night, I was the guy helping organize some of the London Ethereum meetups with a chap called Stephan to all uh, which, if any of you have long memories, will remember the dow hack and the dow. He was uh, he was the main character and a lot of that stuff. But was um was very, very interesting. The first ever ever Ethereum meetup in London was presented by Charles Hoskinson, now of Cardano fame, and also Vitalik Buterin- Skyped him. That's how long ago that was. Skype isn't even a thing anymore.

Simon Taylor:

So, yeah, and then through sort of 2016, 17, 2021, I've seen these cycles come and go, and in a bull market, I'm the guy from FinTech and TradFi come and go, and in a bull market, I'm the guy from fintech and tradfi that speaks crypto. And in a bear market, I'm the fintech guy again, and I think I'm the same guy. Kind of consistently, I'm writing about the same stuff, but it's fascinating. I wrote a piece on stablecoins in 2013. Zero clicks. I wrote a piece every other week on stablecoins. It's all people want to read. So, yeah, I've been in this world for a while. You can see the gray hair.

Chuk Okpalugo:

Now you can see it that's so interesting and it really does flow, ebb and flow with the times and the market, and sometimes the stock price, are really to call it, the bitcoin and ethereum prices, and it's good to have a leg in both worlds. Obviously, the convergence is where a lot of that is happening, but it also means that you can do the translation and both sides do need to speak to each other. That's the only way that we will get to mainstream adoption. But on the media side, you started blockchain insider in 2017, so right in the thick of ethereum, icos you know ico.

Chuk Okpalugo:

Back then we were still saying DLT blockchain, not Bitcoin. There was that whole era. The idea of a Bitcoin ETF by the largest asset manager in the world was like a far out idea back at that point. What was the interest from financial institutions at that time and how has that evolved since? You mentioned, you know, being kind of lightly hushed at Barclays and now it's all anyone can talk about. So I think you've seen the insights of how this has evolved. I would love to get your insight there.

Simon Taylor:

Yeah, somebody once said to me that the payments industry moves in seven-year increments and I think that's probably about right. Say, in 2027, it'll be a decade since that sort of ICO boom and DLT Bitcoin, not blockchain or 2025 actually was when a lot of those headlines were really first coming around. We're now starting to see those institutions move into it in a meaningful way. So a decade later, you're seeing the baby steps and in another decade I think it will be a lot of volume will be running across these things Sort of almost mirrors cloud adoption Like I can't name a large financial institution that has more than 10% of its global workloads on cloud and in a decade's time, will that be 20% or 30%? I don't think it'll be 100%, and that's kind of what you're looking at when you're dealing with incumbents. It's just really hard to change them and unless you've been inside them, you don't know all of the billions of tiny reasons why that's so incredibly hard. Part of it is change takes time, but I think the other biggest thing that's changed since back then I mean I remember we did the first episode of Blockchain Insider we got really lucky because we had both founders of Tezos on the day of their ICO, and so that just blew up the numbers for that show and did extremely well, and we were also one of the only games in town. This predates Bankless, it predates Empire, and so that was. You know, if we'd have kept at it, I think we'd have probably been the OG podcast.

Simon Taylor:

But the market cycles turned, seen something where, inside of a large financial institution, it takes a lot of political capital for anybody to get a project running and to get it anywhere near production. Firstly, to get it near a press release, secondly, to get it near production. And if you're going to do that, you need the political environment on the outside world to be supportive for a long time, because it is just going to take you a long time to execute. It's going to take you time to mobilize. So every time there's a bear market, these financial institutions get some of the way and then, okay, maybe the on-chain stuff goes into the long grass and we just focus in on where we've got value and then cycle repeats and cycle repeats, and so you've your job inside of a financial institution is to do just enough, to never give up your political capital to be able to do the right thing when the time comes, and I think that regulation is the time that's come.

Simon Taylor:

Regulation is a big, big shift and eye opening moment and we've gone from financial institutions just talking about operating on closed networks to quietly coming on chain, and that is a Rubicon crossing moment. There's only so much fun you can have on your own blockchain. You eventually need to open that loop. Don't get me wrong JP Morgan is so massive. They can have a lot of fun on their blockchain and I think there's an interesting podcast one day about why that's a lot better than people realize. All of that said, there's so much more upside in them going open loop than there is being closed loop. They know that.

Chuk Okpalugo:

I think everybody in the world knows that the question is always when and how, not if yeah, and there's, there's for them so much upside, starting internally, building in that internal like political capital, showing the use cases, getting those reps in. And then there's even more upside, as you say, from making an open loop, and I think the slow pace of innovation is not necessarily just the technical side of things, it's internal coordination in a large financial institution with risk and compliance. I think there is something to be said about the evangelization of the podcast that you've been a part of and the newsletters in slowly bringing people onto the same page so that they can start doing the internal work necessary to start the 10-year process of innovating inside a large bank.

Simon Taylor:

Do you know what's funny, alex? At Sardine, alex Kushnier, shout out to Alex, what a brilliant, brilliant mind he is. He once said, alex Kushnier, shout out to Alex, what a brilliant, brilliant mind he is. He once said, simon, your role in the industry is to hypnotize the industry to believe the future is already here and they just need to get on with it. And I said, well, the future is here. And I think that's kind of. Maybe I've hypnotized myself or maybe it's just I live in that world where I'm like, well, of course you've got to get on with it. The barbarians are already through the gate. The question is now are you going to have any market share left at the end of it and what are you going to do about it? So that's generally the perspective I take is most of my job inside of a financial institution was explaining this stuff step by step by step by step by step, so that anybody that had any gaps of knowledge about how to proceed, we could close those gaps, and once we've done that, then we can move forward, because large organizations are naturally a coordination problem. Then you add delays and processes over the top of them and closing those knowledge gaps are the way you unlock progress inside of a large organization. It's absolutely critical and really large organizations and TradFi is just a coordination problem. It's funny.

Simon Taylor:

I was speaking to a chief AI officer recently who said they had a team or a division inside the bank that was able to get access to ChatGPT Enterprise and they took a project that their IT team said was going to take a million dollars in 12 months and they did it in half a day and they were like why? And the assumption was well, maybe these guys can't write the code and actually no, the javascript, for that was probably pretty simple. You could have built it. Uh, it was entirely possible. If chat gpt can build it, then a junior engineer can build it like it's it's. It's not still amazing at some of that stuff. What it did is it completely shortcutted the internal process and coordination problems. The person who was the business owner just did it. That is a huge disruptive force and, again, a bit of a tangent.

Raj Parekh:

But well, I mean speaking of speaking of like time warps. I mean, obviously, you know the announcement last week. I mean just getting into what a lot of folks are really excited to dive into is Tempo. Obviously, there's a lot to unpack here and I think you did a fantastic job of breaking down the rationale in your latest FinTech brain food insider from Barclays to Sardine to now saying wait, we're now going to launch an L1 blockchain to take what someone was shushing you about at a bank a long time ago to now where we are today. Maybe unpack the decision a little bit more, maybe a little bit more color from the blog post you put out, but also maybe describe what is Tempo for folks that don't know yet.

Simon Taylor:

So Tempo is a separate operating company. It is not Stripe, it is not Paradigm. It is an entirely separate company, incubated and supported by those two organizations, with some staff and talent supporting around the scenes, of course. But it is a separate operating company and its goal is to build a dedicated payments chain, a blockchain that is an alternative layer one, so an alternative to Ethereum or Solana, specifically using an EVM compatible model. Now, what's different about it is it's being built for performance and throughput and fast finality, and it's got other goals like stablecoin neutrality, so anybody can issue a stablecoin on it. It is permissionless in that sense. But we're also looking at how we can build in compliance features and how we can build in privacy features so that financial institutions could operate in it with confidence, that anybody that's regulated could operate in confidence, but that innovators can too.

Simon Taylor:

So I spoke a lot about those tensions and we can kind of dive more into those. But that hopefully answers the what is it question, because there's corp chains and all of this sort of stuff and honestly, I was watching all of that just with the Jean-Luc Picard face palm emoji, just the meme. I was just no guys, that's the narrative you want, but it's not why. I joined Like no and okay, the guy from the bank joined, yeah, okay, now you can already see the comment section running ahead of itself. So that's kind of what it is. But my journey then is quite an important one, because I saw all of the problems inside of a bank. I was the change agent inside the bank, going we should change this. I was then the person trying to convince the market and build the megaphone and get into the nuances. It's like what we do on Tokenized is we get into the nuances of the payments industry and we unpack those in a stablecoin context so that you can make more sense of them, so that everything I was doing inside the bank about you know. We gave accounts to Circle and Coinbase. We were the first G-CIFI in Europe to do that, and the reason we were able to do that is because we, step by step by step, understood it, doing that at scale.

Simon Taylor:

That was the goal with media. It was to make it feel safer for institutions, because I share the goal that a lot of people in the crypto industry do that. A fairer, more inclusive, more efficient, more transparent financial infrastructure that is just better for everybody. Gdp of the world and, frankly, it's going to deal with some of the gatekeeper issues and some of the incentive structure issues that we might have had coming out of the financial crisis, and elsewise we get a new design model. What excites me the most is payments infrastructure that's ready for the internet, payments infrastructure that's ready for AI, payments infrastructure that has really grown up and, if you'll indulge me, I'll come back to my story as we take a bit of a loop.

Simon Taylor:

It's a really fascinating study of history where, in the 1750s, the Industrial Revolution was kicking off in the United Kingdom and what you found was that the Royal Mint in the United Kingdom couldn't print money fast enough for the amount of growth that was coming in Interesting. So what the local machinists did is they started printing their own coins and building their own institutions to cover the costs of their supply chain. The merchants created their own money and eventually the central bank realized that they weren't going to be able to have the technology advantages that the private sector did. So they co-opted this model in the sort of 1760s 1770s and started legitimizing it the sort of 1760s 1770s and started legitimizing it, and then by the 1830s, they'd managed to adopt all of the technology that the private sector had and brought it all back under the government again.

Simon Taylor:

Now, if you look at the railroad boom of the 1850s 1860s, there were something called wildcat banks. These were banks that existed where the wildcats roam, because building railroads into the middle of nowhere had no infrastructure. How do you get dollars where there's no railroad? You need a bank that's going to make them locally. The small problem with those is some of them were just silly and they made too much, so eventually you get the Federal Reserve and the OCC and central banks and all of the things that follow it. If you study history, you will see that this is a pattern that repeats. When there is some sort of technology inflection point, like an internet, like AI, the merchants invent new money, and I think that's what's going on with stablecoins is that we need internet native money, and stablecoins are the first type of internet native money and they're not going to be the only type of internet native money. That's where I come from in financial history and financial institutions.

Simon Taylor:

Now, going back to my story, having been the storyteller in media, the other thing I noticed is I love all of that. One small problem I have seen firsthand the human suffering that can come from getting compliance wrong. Narco-capitalists may have less of an issue with human slavery and child sexual exploitation. I personally have a massive problem with that and I would like to do something to ensure that we can have this future world, this future vision, but we can also bake in the kind of protections that I believe society wants and that I think are a good thing. So how do I do that? Well, that's a blind spot for me, but frankly, this guy Supes Ranjan, built the fraud team at Coinbase, built a lot of their compliance, then did it at Revolut knows more than I'll ever know. This is something I'm going to need to understand. So let's join Sardine and let's figure out how we can make AI be our best defense against, uh, adversarial actors, nation states, against hacks, against all of that kind of stuff. So sardine was a real grounding in, I think, what was going to be the unlock before regulation came along. Regulation lands aha, right.

Simon Taylor:

And then who slides into my dms, Matt Huang, and says Simon, you seem pretty doing a lot of blogging about stablecoins lately. You ever thought about doing something different and something interesting? And honestly, it was. Just what a team. I mean not just Matt, but if you look at Dan and Georgios and Malesh, it's like the Avengers, I mean.

Simon Taylor:

This is just an unbelievable track record, and I've never built a blockchain before. I've been around the edges of other people doing it. I was there when Gavin would give his first talk at the London Ethereum meetup. I sort of have been in it, you know, like a, a walk-on in the background shot of a lot of these moments never been in the team.

Simon Taylor:

So that was exciting and to your point, chuck, being the tradfi translator is a unique position inside an organization like that, and that's kind of my role Translate TradFi just enough for the internal teams, but also take what the teams are building and translate those back out to TradFi and make sure we're building something that finds those tension points, those trade-offs between not giving up on the benefits of decentralization, credible neutrality, lack of platform lock-in, whilst getting the benefits and some of the good things I like about TradFi, which is preventing human suffering and human misery and being able to do things really, really performantly and in a resilient way. Those are the things that are must-haves for Tratify. So how do we find those tension points? And that was the story.

Raj Parekh:

I have to call it out directly and you kind of touched on some of these points, but a lot of crypto Twitter over the weekend last few days. There's like Libra 2.0 conversations, corpchain. You tackled it in a few different parts, but maybe let's just address it directly as well. I mean, this is a permissionless L1. This is an open source system, but maybe, if you can describe a little bit more, maybe provide some feedback for the folks that maybe are pushing back on what Tempo actually is.

Simon Taylor:

Firstly, because of the leaks, because of the rumors that were around before the announcement, I think people had already made up their mind and had a thesis about what it was. And then the announcement was ah see, I told you so without necessarily looking at the detail. Secondly, I think the other thing is that people, frankly, have probably invested a lot of time and energy in doing something different and wanted this to be something different. And then the Libra comparison. They had a lot of logos on their launch. This had a lot of logos on its launch. So I can see the rationale, but fundamentally, I think they are different things. The most different thing is timing versus Libra.

Simon Taylor:

Libra was a phenomenal idea. When you look back on it, it's like how do you bring a lot of volume on chain? You take 2 billion users and some big companies and you try and build this decentralized cash model. I do think that that was always going to be perceived as a massive sovereignty risk and I also think that, frankly, the technology wasn't ready. What Libra ended up building went on to become Aptos and SWE and the Lightning Network some of the best engineering that has been done in the industry by far. So what they built is now considered best in class. It was never an engineering problem, it was a timing problem and I think also they weren't in a world where stable coins are regulated and are a thing. So timing is beneficial.

Simon Taylor:

And then, if you look at some of the players involved back then certainly the leaders I would argue personally there wasn't a lot of payments experience. There wasn't a lot of understanding of when you build at scale multi-trillion dollar payments platforms, what are the things that needs to be able to do and what would you want from it. And I think there's a little bit of that as well that Tempo has within it. So the logos around it are design partners. So you would see companies, everybody from Standard Chartered and Deutsche Bank to OpenAI, to Visa, to DoorDash, right. There's a different kind of animal for different parts of the market. But what are they doing? They're helping design the network and potentially, maybe one day some of them might be validators of that network. So it's not like Paradigm or Stripe will be the only validators. There will be other validators in the future and Athena and other chains have done this in the past. There are examples of where things start off with a centralized validator and progressively decentralized.

Simon Taylor:

That is a well-worn model, but job number one is actually to ensure that some of these net new design choices that have been made, like sub-second finality, can be delivered against, like these new features that are being built stablecoin neutrality with an enshrined AMM. Can those be built? Can they succeed? Can they be robust? Can they solve the use cases that we want it to do for these design partners testnet after testnet, and then, if it can do that, then there are many options on how that progresses from there, and I know that Georgios has been leading a lot of the EIPs lately the Ethereum improvement plans.

Simon Taylor:

There's absolutely a desire to play as well as possible in the Ethereum ecosystem. This is the best answer that this team can manage, given all of the things it's trying to achieve and that may continue to evolve over time. So a lot of people wanted it to be one thing, wanted it to be something else. I don't think it's a corp chain. That's not why I joined. I think it's something that's being incubated by large organizations with experience in payments, but it's being built with the ethos of decentralization and neutrality.

Chuk Okpalugo:

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Raj Parekh:

I was in the front lines at Visa during the Facebook Libra Association days and I think one of the things that I saw was one we never engaged with the regulators. Early on, there was a basket of currencies right, it wasn't so. That would kind of look like a securities versus like your traditional stable coin as well. I remember just badly wanting it to work because I truly believe in open source systems, but obviously, like a series of, I think, miscues obviously didn't allow it to be successful. But it's helpful to, I think, understand from your view that these are design partners. There's still a room to actually play with the Ethereum ecosystem. At the same time, you know there's a framework that you guys are thinking about it in terms of, like, what the blockchain actually means for TradFi, but also leveraging the power of blockchains too.

Simon Taylor:

And I should say, like we're open to and in discussions with multiple third-party infrastructure providers. Third parties should use this thing and every third party everywhere in the stack. Come and talk to tempo, the separate legal entity that is trying to build settlement infrastructure for the internet that can move at internet scale, that can do trillions of dollars worth of transactions. Because if you don't believe we're open, come chat to us and see if we'll send you our docs like we'll show you. We want to work, work with you. We're still a small team but we're growing.

Chuk Okpalugo:

I think that's a really important point and it's going to be more important over time. There's what the market thinks, there's what people, competitors, adjacent blockchains or adjacent parties may think, and then there's what's actually going to happen and what's real, and I think it's really, really challenging that this is almost like the reality is pragmatic In a PVP world. There's what you want to do, what you actually say you'll do, what you'll actually do, and then there's what your competitors or the market commentators want to say that you're thinking and what you're actually doing, and you have to navigate all of that.

Simon Taylor:

I don't think it's PVP. I've always been of the view that it's let's say it's CVE, crypto versus everyone. But crypto is a bigger tent these days. Crypto is really, to my mind, people who believe that on-chain is the future of finance and the future of the global economy. The internet economy itself will move on-chain. Doing that is going to require some personal growth on behalf of all of us in the industry, because I think that means making someone comfortable. Growing pains Like this is the ugly teenage phase of crypto. We've maybe sort of the six-year-old us that was coloring rainbows might have to deal with some of that, getting punched in the face by reality a couple of times and having worked in TradFi for long enough, I can tell you there are a lot of those moments. It mean we should give up our ideals, we should work towards them, but we've got to always find those tension points and keep moving them forward. Never give up on the ideals, just work pragmatically right and yeah, and that's it.

Chuk Okpalugo:

It's all about the trade-offs and there's a couple of trade-offs and I think I really like the way that you kind of laid it out in one of the more recent FinTech Brain Foods that described your decision to join Tempo, and I think we can use that as a framework and in that, for those who haven't seen it, simon talks about what it takes for crypto and blockchain and stablecoins to make a meaningful impact on TradFi and separating the trade-offs into three explicit trade-offs Performance and decentralization, distribution and neutrality, and then compatibility and innovation. And of all those, I think it's the second two that really drove the debate on Twitter, crypto, twitter or maybe even stablecoin Twitter at this point. So I think we should get into it and kind of unpack some of these tensions. So, distribution and neutrality I think this is the biggest one where, on the one hand, stripe, the parties and the design partners all bring with them a large number of participants, maybe that's merchants, maybe that's consumers, it's transaction volume and with the adoption of anything, you really need to have one side of the multi-sided marketplace or one side of the multiplayer payments use cases, and so this is a very, very powerful tool to have when trying to start something off, but, at the same time, the same power that enables you to unlock that growth from the beginning can be seen from others.

Chuk Okpalugo:

As this is aligned with your incentives, it's more belonging to you as a chain or as an entity or as a corporate than there's the structure of the entity itself, which is, like you said, separate, but I think the initial partners have an equity stake. Maybe there'll be a token. How will that be distributed? Will it be for everybody? And going all the way over to something that's widely regarded as fully neutral, such as Ethereum, where there's not one individual corporation, there's not even one individual region? There's lots of different ways to break down neutrality. You can talk about on the technical side, from the validator set, the systems that folks are used to actually interact with the chain. Then you have just the social angles, the ecosystem the social constructs, the governance all of that, Exactly exactly.

Simon Taylor:

I've always viewed these things as a spectrum, right spectrum between, sort of. On one hand, you might have Conexus, which has a lot of distribution and all of the backward compatibility with TradFi, but it's not open at all. It's completely closed and that's valuable for them. And now they're taking baby steps to how do we open it. Maybe what Robinhood has announced, which, ironically, is an L2, just point that out that L2 is built by Robinhood for Robinhood and, by their own admission, it might end up being something else. They're just trialing it. They're trying to figure this out as they go and I think a lot of people are in that phase. It's not a separate company. It's not talking about those tensions and those trade-offs. It's just trying to solve that one specific use case and then, as you say, on the other end, you'll have an Ethereum and something else. Much more open to innovation. Solana, you see a lot of innovation on, but maybe is a slightly smaller validator set. You still see massive innovation, but you don't see as much technical neutrality. So there's some interesting trade-offs wherever you go along that spectrum, and I think it is just about finding that way.

Simon Taylor:

In the middle, Tradfi will always need I mean, they're regulated. They can't not have KYC, they can't not have privacy. They need to have those things in order to move it, and none of the chains are capable of giving them what they need right now. Otherwise you'd see them using them right, like. Tradfi would quite happily take all of its internal costs and cut that cost and run it on some mutualized infrastructure if it was every bit as good as what they've done. Let me zoom out for a second. A lot of people confuse what makes Connexus really, really useful and what makes City Token Surfers and HSBC Like. Why have these institutions built their own blockchain? Surely they could just build their own mainframe, right? Just one big database. Let me tell you something Every time you say surely they should, I'm going to be the guy that goes no, no, try and convert 68 mainframes in 68 different regulatory jurisdictions, each with millions of lines of code and nobody alive knows how they work, and each one plumbed into 3,000 different systems.

Simon Taylor:

If you can solve that, you'll be a billionaire, if not a trillionaire. The hyperscalers have been trying to solve this for decades. It's an unbelievably hard thing. Try performing open heart surgery on top of a fault line in the middle of a nuclear meltdown Like it's so hard.

Simon Taylor:

What internal blockchains do is they provide this wonderfully simple abstraction where every dollar and every account and every legal entity can have their own token on a blockchain, regardless of their mainframe. It becomes the accounting ledger. It's a distributed ledger, dare I say it. It's this abstraction from their internal mainframes and what it does is it gives them instant 24-7 cross-border settlement that they can instantly reconcile. It gives them all of the benefits of being on-chain, but just inside their closed loop, which is pretty big.

Simon Taylor:

Now, if they could have that with everybody else in the world, the amount of cost that would save them would be enormous. The amount of new business they could do across it would be enormous. But why haven't they done it? Partially, sure, there's probably some competitive risk, but the much bigger one is nobody solved privacy and nobody has really solved how you make KYC work inside it and how it works, and it's backwardly compatible. So I think that that is so wildly misunderstood about the TradFi institutions, and it's funny how crypto Twitter both simultaneously gets incredibly excited when a TradFi does something and it goes this is good for my bags. The institutions are coming and then on the other side of it sort of believes it's selling out the ethos, and what you need to do instead is understand the motivations of everybody involved and the challenges they're working with.

Chuk Okpalugo:

Imagine they're rational actors with rational problems trying to achieve a rational outcome, and then it looks a little bit differently and I think that the the rational approach, or thinking about it rationally, putting yourself in the shoes of these capitalist institutions puts you in a shoe of well. If you're going to have to build KYC, build the compliance, innovate. That's a lot of investment, that's a lot of time and effort. Why shouldn't I own the rails? Why shouldn't I own the outcome?

Chuk Okpalugo:

I think what lots of folks struggle with and it makes sense is how do you get disparate parties to invest in a system that benefits everybody where they don't capture the upside and I think you know you mentioned Robinhood and other exchanges that have their own chains where those L2s are, you know can initially be seated with their customers, but then they're mostly trading. Then maybe some social, maybe add some payments, but you know they can easily justify to their shareholders. This is a lot of value accruing to us. I think in the payments landscape, as you're mentioning, there's still a lot of work that needs to get done on the KYC and compliance and other things to make payments really work at scale. How do you create a set of incentives that gets everybody building in a decentralized way?

Simon Taylor:

A lot of that comes down to who gets to be a validator We'll have to find out and also who gets to use this system and what benefit does it give them versus using their own internal systems. I would say to any traditional finance institution would you like me to remove 80% of your back office costs and problems and reconciliation issues and errors and compliance issues, because we're giving it a shot with one of the world's best teams. Don't know if we'll get there, but if you'd like to do that, then let's have a conversation about how we'll do it, because I really do believe this is one of the best teams in the world to be able to achieve that. So I think there's a massive rationale and you know look, this isn't alien for financial institutions. They've done it many times creating market structure, the DTCC, cls I mean the amount of NASDAQ, new York Stock Exchange, refinitiv, london Stock Exchange. There's Euroclear, clearstream. There are so many of these things. It's very, very common to have market structure.

Simon Taylor:

I think the fear from some folks is that's all it can be. It's like it's just another bit of market structure. My view would be if that's all it is, that's still amazing. But if this is why I'm sort of like but don't give up the ethos. This can be more than that. This should be settlement infrastructure for the internet and you can have market structure like benefits from it. It's just reversing the order of those two goals and narratives, because if you build Sysmon infrastructure for the internet, then you can also build market structure on that quite easily. And the way you build market structure on it might look a little bit different to the way you just use it as somebody using it as a cash-like instrument, and I think that goes into the structure of the entity itself and the chain itself.

Chuk Okpalugo:

So, thinking of it as market structure, there's the features and the benefits of that, and then there's how, the actual implementation of it and I think obviously what rubbed a lot of folks the wrong way for whatever reason.

Chuk Okpalugo:

We can go into that, tempo is built as an alternative L1, a new tech stack Inheriting it's still EVM compatible, so it inherits a lot of the tech and innovation that has been built up over time, but not directly plugging it into this existing network of chains that's built on Ethereum. And so I think the third kind of trade-off you mentioned was this compatibility versus innovation and finding that trade-off that will get these financial institutions to think through their mainframes and say, actually, this is the best way for us to participate in this system. How do you think about the design decisions of okay, how do we achieve dedicated payment rails, the throughput, the starting with the mission validator set and eventually moving to the decentralized set of validators, the permission validator set and then eventually moving to a decentralized set of validators and also kind of being this TradFi compliant chain? How do you think about achieving all those things on existing L2s or on Ethereum versus doing it fresh on a brand new L1?.

Simon Taylor:

So it gets above my pay grade pretty quickly on the technical side. But I have been walked through multiple times just how hard it is to get to sub-second finality on an L2. And if anybody wants to name one where that's possible, would love to look at it. My understanding is it's not possible to get to sub-second finality on an L2. So right out the gate, your primary requirement is not possible. Secondly, you also give up a little bit of your actual decentralization on an L2, because an L2 has a single sequencer. Now there are proposals to make that a rotating sequencer or something else, and there are many interesting innovations in that.

Simon Taylor:

But as of right now, if you want to be an L2, then you have to use the standard sort of EVMs, which slows your throughput in your L2. You then have to use a single sequencer. So if you're using base, everything goes through Coinbase's sequencer. You have to trust them. That's not decentralized not nearly as much as it looks and then your finality only really comes after about 15 minutes or so, when you settle with Ethereum. That's when it's really, really final and there's no way back. So you don't have anything like sub-second finality, no matter how performant the L2 is.

Simon Taylor:

And so one of the things you need to do is to deliver what payments needs, and this comes to my point in that Georgios has been leading a lot of work on performance more generally in the Ethereum community and there is a movie version of this that plays out where these things converge in some way, where the family gets itself together and it all goes back to Ethereum, because there's a lot of love for decentralization and Ethereum as somebody who was involved from 2013. There's a real upside and I think they are the most obvious candidate for the universal fabric of commerce, for the internet right, but its upgrade cycle is very, very slow. It needs to take a lot of the community with it. So if this market structure over here can get to some level of decentralization, can solve a lot of payments use cases, can bring in a lot of volume volume and is philosophically excited to figure out how it works with and supports the ethereum ecosystem, that's a great outcome and I think that was.

Chuk Okpalugo:

That conversation was one of the busiest ones on twitter over the past weekend and I won't bore the audience you don't necessarily have to go through but there's a lot of detail there and I learned a tremendous amount around the latest of innovations. But I think there was a consensus that whilst a lot of this stuff is possible on an L2, like theoretically, it hasn't been done yet and, like you mentioned, there aren't that many, if at all, examples of decentralized sequences on L2s. There aren't any examples yet of sub-second finality. These things are all possible and I think you know you've got mega ETH in terms of the TPS and other proposals.

Chuk Okpalugo:

But if I were to put myself in the shoes of the Tempo team, if you're thinking through, okay, we need to build this stuff, we need to innovate fresh to make this thing happen. Do you want to have a dependency or do you want to move as quickly as possible, make your own mistakes and innovate with the design partners for the use cases that they're looking to do? I think when you put those two things side by side, to me it makes sense why you'd want to remove those dependencies and go with an L1. And in the meantime, I think for the rest of the ecosystem. There's a lot of excitement, but also pressure to say, okay, well, why did these really smart people not build on our L2s or on our system? Okay, we have things to improve and there's already proposals to improve. Finality, on Ethereum, lots of teams are putting together or coming out of the woodwork with actually, we have a solution for this. So the entire space is being moved forward when firms make very kind of rational decisions on the technology side of things.

Simon Taylor:

If you zoom all the way out, the on-chain ecosystem is being forced into uncomfortable, sometimes adaptations because of customer demand, and that's called product right. It's kind of when the market wants something, if nobody's offering it, somebody goes and builds it and then you go wait, should I have built that? And then maybe the answer is yes and this is good. I think this is fundamentally a good thing. Yes, innovate, build more solutions. That's an amazing, amazing thing. And if we can use them and partner together, let's talk about it, because you know, like I said, philosophically there's nothing but love.

Raj Parekh:

And then you know, I think what people I feel like fail to even talk about it deeply is actually the use cases. I, what people I feel like failed to even talk about it deeply, is actually the use cases. I think the criticism of crypto for many years, as you've been building Blockchain Insider is the use cases. Well, funny enough, on Tempo, you called out six distinct use cases. Obviously a lot of incredible design partners, but maybe let's dive into maybe we can pick a few of these. But I think the one that's probably the most interesting that's not really talked about enough is you have design partners like OpenAI Anthropic, specifically calling it agentic payments. We call this show Money Code, and the cool thing is LLMs can now do a lot of really unique things and agentic payments is on the horizon as well. But maybe describe what a potential future looks like with Tempo with some of these use cases and, I think, specifically dive into what the foundational models and how they can interact with this too.

Simon Taylor:

Yeah. So there's a lot of interesting companies I would point you to, like Catena Labs and Skyfire, that are already trying to build this stuff on other chains, which is how do agents pay agents and how does anybody audit and unwind that? That was done properly, and the great thing about a blockchain is it's kind of like an audit trail with PKI signatures and a rule set, like this state machine that somebody built is almost perfect for that ability to have a series of transactions to give a mandate within the smart contract thing, to have multiple signatures required before anything can happen. There are so many things that make them just really ideal for that. And, yeah, that's one set of use cases that, whilst there's not a lot of volume there yet, pretty much all the big AI labs are excited about moving into an ecosystem where agents are paying agents. So how do you make that happen? Well, it's kind of hard to do that on existing infrastructure where your best case is 21 cents on a debit card transaction, plus maybe even half a percent or 30 bips if you're in Europe On a sub-cent transaction. 21 cents is prohibitively expensive. We desperately need something that is much more economically rational and performant and ultra low cost. So working with them to figure out, okay, what's those things and what are those proofs and how do we make life easier for you and your developers? And I think that's really really interesting to kind of play with. And as you talk to them they'll sort of tell you that, like well, what we really want is some consistency. We really want a very clean spec. One of the big issues they've had with chains that are quite performant is they do many things for many people and they can get congested. So I don't have that reliability. It's not always going to work and that might break my workflow. I just need it to kind of work a bit like either synchronously or asynchronously. Ideally synchronously it needs to kick off a chain of events and a payment, then a payment, then a payment, then a payment, then a payment, and these sequences need to really run like clockwork. So I think that's a big unlock that the team's going to be focusing on to get to that agent-to-agent kind of commerce story. Going to be focusing on to get to that agent to agent kind of commerce story. And then there's the broader agentic commerce on, like consumer tells agent to go buy a thing. Maybe that comes on chain, maybe it doesn't like I don't know.

Simon Taylor:

I I'm actually more excited by instant settlement for some of the traditional commerce use cases. So, um, I don't think that you're going to be dealing with like putting other payments networks or anything anywhere near out of a customer's hands because they're used to using them. But one of the things that is largely missing is the ability that when a customer makes a payment, for that money to be in the merchant's bank account instantly, that is very, very hard. When Fedwire is closed on Sundays.

Simon Taylor:

It's very, very hard if you're going international and you've got to deal with SWIFT and cut-off times and I say SWIFT what I really mean is correspondent banking. It's not SWIFT's fault, to be absolutely clear. So that issue is one where instant settlement is just really, really hard. Why don't we make that happen? And I think that by itself is just an enormous business case for anybody in payments for any merchant. The amount of risk that would take out the system would be unbelievable. So there's lots of low-hanging fruit like that, but really bringing volume onto it and testing it is kind of the phase we're in.

Raj Parekh:

Yeah, no, it makes sense. I mean, I always joke with people that with agentic payments, you can give them a credit card number. You give your agent a credit card number, they make that transaction, but you know that clearing and that authorization layer is actually going to happen through the traditional rails, but it's the settlement behind the scenes that can actually happen instantly with T plus zero. So, yes, you can give that card to an agent, but how do you make that settlement actually way more efficient? That's where blockchains and settlement can come into play too, and that's actually what we built at Visa almost five, six years ago with stablecoin settlement.

Raj Parekh:

We were trying to unpack the layer and say where can Visa play with crypto and blockchains? We were not going to change clearing and recon. That's insane. But we can actually say can we do T plus zero settlement times anywhere in the world for all the different banks that we work with? That was a very clear use case for stablecoins and blockchains. And so I think to your point yes, agents will be there and yes, you can potentially ask an agent to go make a transaction, but it's the settlement side that's actually the real unlock to do these faster transactions too. So that makes total sense.

Simon Taylor:

Well, it's also the settlement side, because it's one thing to authorize a transaction inside of one card network right Like, I have given this agent this card but it's not like giving it settled value in a wallet. If it has settled value in a wallet, it can then use any payment network, and I think that's just a fundamentally different perspective that the agent then has if it wants to operate in India or in China or somewhere else where that one card network might not have as much dominance. And I think how you can sort of be interoperable with other types of payment flows. Fascinatingly, one of the biggest areas of explosive growth in agentic commerce is B2B. It's using the old ACH and Fedwire type of payments. But having agents do everything before the payment and all of those ops, like working with all of those startups, all of those four fintech companies I cover every week how do I unpack what they're struggling with and build something that could help them?

Raj Parekh:

Yeah, that makes total sense. I know we haven't really talked about the other design partners, but maybe what can we expect from the interaction with the other design partners, like DoorDash, or like Aviza Anthropic OpenAI, or like a Visa Anthropic OpenAI. Like how do you expand the collaboration to take place over the next year or two as you're defining some of these use cases and the actual implementation further?

Simon Taylor:

So I think there's going to be two speeds, right Like there's going to be the startups who are trying to put volume on there today, so we're battle testing the network, and then there are the design partners that are really helping us think through the gnarly stuff so that they could bring mainstream volume on. So think of those two speeds. Maybe somebody that does consumer deliveries might be somewhere in the middle of that spectrum. Maybe a neobank might be earlier in that spectrum and maybe, like a raw startup, series A, right at the beginning of that spectrum, versus a financial institution maybe a little bit later. But there are some financial institutions that do settlement for stablecoins today and those types of financial institutions can teach us a lot, frankly, because they've been operating in the industry for a while. So we're in listening and in product mode. Like I said, testnet one is not live yet.

Chuk Okpalugo:

We have a hypothesis of what it needs to be and we've got a lot of build and a lot of working to do in front of us yeah, it's a tremendous, tremendous opportunity and, like I say, a huge task to take on, which I'm sure makes it incredibly exciting and and everyone's really, really excited to see the work that you're going to do and the team is going to do, if it's going to be any team.

Chuk Okpalugo:

If you guys can't do it, then, on the one hand, it's going to be a bit of an education to the entire ecosystem of this is really really, really, really hard and you need to pull in beyond distribution. You need to be able to. Either here's how it works with distribution, with partners, with this technology or evangelization, or it's another kind of example of openness needs to be built in really, really slowly over decades and decades and decades, and you can't get through it, and I think, in either way, the entire ecosystem will benefit. But we're all kind of rooting for the progress of the ecosystem and we're watching and waiting to see all the innovations that you guys will come up with and continue to add to the open source ethos.

Simon Taylor:

Do we get to speed run this thing, or are we just building eXp for the community? There's only one way to find out.

Chuk Okpalugo:

Hey, everyone will benefit either way.

Raj Parekh:

I'm sure, everything counts.

Chuk Okpalugo:

Yeah, exactly, and the innovations that will be developed is shared and people will continue to build on, and that is part of the kind of the core of the composability that occurs in crypto. So this has been fantastic. Again, really, really happy that you could join us today and talk through your background, your story and tempo Help explain what it really is, what it's doing and why it's so necessary and relevant right now. And one thing we're going to try and do actually as we wrap up here, simon, is some rapid-fire questions. So first one favorite book movie or TV show.

Simon Taylor:

My favourite video game is probably Skate 2. That's where I went to Favourite movie, my God Favourite video game Nights into Dreams Half-Life. I actually thought Half-Life was phenomenal. Storytelling as well. Valve did an amazing job throughout that Books. There are probably a handful of the greats that I go back to consistently. There's one called Radical Honesty by Brad Blanton. That's a really hard read but it's about sort of seeing through your own crap, and I read that annually because it's very easy to get lost in our own crap. So many to name.

Chuk Okpalugo:

And we could have probably another whole session on gaming, and I know obviously you've got a gaming chair, you've got a Sega in the background, but you know that's for another time. Okay, so another one, more aligned with, I'm sure, what you think about every day. If we project out five years from now, what does success look like for Tempo?

Simon Taylor:

Single digit, at a minimum double digit percentage of global payment volume running through the network. I mean, if you can get to single digit, mid single digit percentage of global payments volume, settling on it, wow, trillions.

Chuk Okpalugo:

Who else should we bring on the show? That isn't typically on shows and podcasts like this, guerra Kawana.

Simon Taylor:

Love Guerra. I don't know if you've spoken to, like this, guerra Kawana, love Guerra. I don't know if you've spoken to Guerra before Sling Money Runs office over there, knows more about the hard things, about hard things and the edge cases in stablecoins and dealing with all of the real problems that crop up, and I think that would be a massive education for people. Guerra's my homie. Been working with her since the 11FS days but it's that education on the gnarly nuanced, ugly stuff that nobody sees unless you work in ops. That's the stuff you need to understand, internalize, to be able to unlock right. You've been there, raj.

Chuk Okpalugo:

Amazing endorsement and I really agree with that on the education side and I think it happens, it's necessary and relevant across all facets From TradFi we talked about the translation On the crypto side as well better understanding some of the traditional financial perspectives, the features and benefits that they need and the constraints and incentives. I think if everybody understands each other and not to say that in the kind of a kumbaya way, it's really from a product perspective you can build better products, you can make better decisions when you understand all the incentives that play and the constraints, and so the more that we can help decode that, the better, and that's what we're trying to do here. So it's been awesome. Thank you for coming on to the show, simon. To the show, simon. Where can listeners go to learn more about you, simon and Tempo?

Simon Taylor:

So Tempo is tempoxyz. You'll find me screaming into the void at fintechbrainfoodcom, and if you want to be around a lot of conversations like this in person and you happen to be free on the 19th or 20th of November, head to fintechnerdconcom, where we are bringing people who are operators in the weeds of this stuff. If you're trying to build, no matter which company you're from or which chain you're from, please come and take part in being another fintech nerd and getting into the weeds of stuff. So that's where you'll find me. Awesome Raj, what about you?

Raj Parekh:

You can get to know me at MoneyCode with Chuck over here. We'll be coming back weekly.

Chuk Okpalugo:

Head of Stablecoins and Pay payments at monad monadxyz. This has been fun, simon. Appreciate you coming on here, and you can find me at stablecoinblueprintcom on LinkedIn. Chuck Ocpoligo, and an X as well. Chuck underscore XYZ. Thanks so much for listening to Money Code. There was so much to take away from today's conversation. I learned a lot and I hope you did too.

Raj Parekh:

If you enjoyed this episode, do us a favor, share it with someone you know, or give us a five-star rating on Apple, spotify or wherever you get your podcasts from. Until next time.