table of contents
What is TIP-20? Why Tempo Built the Payments-First Token Standard How TIP-20 Extends ERC-20 Core Features of the TIP-20 Standard TIP-20 Infrastructure as the Foundation for Payments-Focused Stablecoins Partner and Ecosystem Support Conclusion Source: FAQ
Existing token standards are not designed for stablecoins used in real-world payments, settlements, and treasury operations. The TIP-20 token standard is Tempo's answer to a well-defined problem. extend ERC-20 It features payments-specific features such as remittance notes, compliance controls, and native reward distribution while maintaining full backwards compatibility. In reality, TIP-20 looks like this: stable coin on Tempo into a regulated and auditable payment instrument rather than a simple transferable token.
In this article, we will explain what TIP-20 is and why tempo We explain how it is built, how it works on a technical level, and why it is important for stablecoin issuers, payment providers, and enterprises.
What is TIP-20?
TIP-20 is Tempo's native alternative token standard. layer 1 blockchain optimized for Stablecoins and real-world payments. Introduced January 6, 2026TIP-20 is primarily designed for stablecoins, but can also be used for other alternative assets, including bridged coins. BTC or ETH.
Technically, TIP-20 is an extension of ERC-20. All standard ERC-20 functionality such as transfers, approvals, and balance checks will work without modification. TIP-20 adds to this baseline the following capabilities required for payment systems operating at scale:
- Transferring notes for adjustment
- Built-in compliance and policy enforcement
- Role-based operational control
- Native compensation and revenue sharing
This approach allows developers and issuers to rely on standardized on-chain primitives rather than building custom logic for each stablecoin deployment.
Why Tempo built a payment-first token standard
Tempo was created to address the structural limitations of existing blockchains used for payments. On the other hand, the following network is Ethereum and Solana Although stablecoins are supported, they are not designed around high-volume, low-latency payment flows or regulated financial operations.
Tempo was incubated by Stripe and Paradigm. Raise $500 million in 2025 It is valued at $5 billion and is backed by companies including Sequoia and Greenoaks. The network targets over 100,000 transactions per second with sub-second finality, predictable fees, and a stablecoin-native design.
Stablecoins are now used for much more than peer-to-peer transfers. These support financial management, cross-border payments, and foreign exchange. However, publishers face recurring challenges, including:
- Coordinating on-chain transfers and off-chain accounting systems
- Enforcement of jurisdiction-specific compliance rules
- Transparently distribute revenue and rewards
- Maintain predictable performance during high-volume payment periods
TIP-20 exists to standardize these requirements at the protocol level.
How TIP-20 extends ERC-20
ERC-20 establishes a shared language for alternative tokens, allowing wallets, exchanges, and applications to integrate assets without any custom work. TIP-20 follows the same philosophy but applies it to a payments-focused stablecoin.
Key enhancements include:
backward compatibility
TIP-20 inherits all the functionality of ERC-20. Existing tools, wallets, and smart contracts can interact with TIP-20 tokens without modification, reducing integration risks.
Payment lanes and predictable fees
Tempo provides dedicated payment lanes and reserved block space for payment transactions. TIP-20 tokens automatically access these lanes, ensuring consistent throughput and predictable fees even during periods of high demand.
flexible payment
The USD-denominated TIP-20 stablecoin can be used to pay transaction fees on Tempo. A protocol-level fee AMM converts fees into preferred assets for validators. Support for stablecoins other than USD is also planned.
Core features of the TIP-20 standard
native currency identifier
TIP-20 supports an optional currency identifier that specifies the fiat currency that the token is backed by, such as USD or EUR. This enables correct pricing, routing, and settlement in Tempo's native DEX and future on-chain FX markets.
Transfer notes for adjustment
Each TIP-20 transfer can include a memo field, allowing you to send an invoice number, payment reference, or internal ID with the transaction. This feature is essential for businesses integrating stablecoin payments with ERP systems or SWIFT-compatible payment engines.
Distribution of rewards and yield
TIP-20 includes an opt-in reward distribution system. Issuers can distribute yield or incentives directly on-chain as chargeable balances or automatically transferred rewards. This supports interest-bearing stablecoins without the need for manual calculations or off-chain adjustments.
Custom policy registry
Compliance is enforced through custom policy registries such as blocklists and whitelists. These registries can be shared across multiple tokens, reducing duplication and ensuring consistent regulatory compliance.
Operation management
Issuers can pause or unpause transfers, enforce supply caps, or perform emergency suspensions. These controls provide the safeguards required by regulated issuers and financial institutions.
Role-based access control
TIP-20 defines roles for mint, write, pause, and administrative actions. Improve operational security by being able to grant or revoke roles without redeploying contracts.
TIP-20 as the basis for a stablecoin focused on payments
TIP-20 is designed to support custom stablecoins tailored to specific financial workflows.
corporate financial management
Companies can issue internal or regulated stablecoins to enable instant fund transfers between subsidiaries. Reward sharing enables automatic sharing of reserve income without the need for off-chain bookkeeping.
cross-border payments
Smaller banks and payment providers can bypass correspondent banking networks. Transfer notes allow stablecoin payments to be integrated with existing coordination systems for cross-border payments.
Wholesale payments and deposit tokens
Policy registry allows stablecoins to be approved for interbank payments. Transfer rules are applied at the token level to support regulated wholesale payment systems.
Interest-bearing stablecoin
Yield distribution is handled natively. Publishers can programmatically share returns with users and intermediaries in real time.
Non-USD stablecoins and on-chain FX
TIP-20 supports currencies other than the US dollar through its native currency identifier. Tempo’s DEX enables swaps between stablecoins and future on-chain foreign exchange.
A real-world example is EURAU, a regulated euro stablecoin designed for European businesses that require compliance, privacy, and predictable payments.
Infrastructure partners and ecosystem support
TIP-20 was launched with support from infrastructure providers such as AllUnity, Bridge, and LayerZero. These partners are deploying TIP-20 compatibility for publishing and bridging.
LayerZero will enable you to extend your existing assets to TIP-20, ensuring that they can be used within Tempo's payments ecosystem from launch. Tempo’s broader ecosystem includes integrations with wallets, developer tools, and liquidity providers.
Developers can deploy TIP-20 tokens via a Factory contract using the reference Solidity implementation found in Tempo's documentation. Fully compatible with EVM, no additional packages are required.
conclusion
TIP-20 is a proprietary token standard designed for stablecoins used for payments, settlements, and treasury operations. By extending ERC-20 with coordination tools, compliance enforcement, and native reward distribution, we address the gaps that limit the adoption of stablecoins in regulated financial environments.
At Tempo, TIP-20 serves as the basic payment primitive, enabling custom stablecoins, predictable fees, and multi-currency support without custom engineering. Its long-term relevance will depend on issuer adoption, regulatory alignment, and the network's ability to deliver throughput and reliability. As stablecoins continue to move into use by enterprises and institutions, standards like TIP-20 will define how those assets will be operated at scale.
source:
- tempo document:Overview of TIP-20 standard
- X post: Tempo announcement introducing the TIP-20 standard
- block works: Tempo $500M Series A funding round
- time blog: TIP-20 Payment Standard
