Tempo’s TIP-20 Token Standard & Why It Matters

Current token requirements weren’t designed for stablecoins utilized in real-world funds, settlement, and treasury operations. The TIP-20 token normal is Tempo’s reply to the clear downside. It extends ERC-20 with payment-specific performance, akin to switch memos, compliance controls, and native reward distribution, whereas remaining totally backward suitable. In sensible phrases, TIP-20 turns stablecoins on Tempo into regulated, auditable fee devices somewhat than easy transferable tokens.

This text explains what TIP-20 is, why Tempo constructed it, the way it works at a technical stage, and why it issues for stablecoin issuers, fee suppliers, and enterprises.

What Is TIP-20?

TIP-20 is the native fungible token normal on Tempo, a Layer-1 blockchain optimized for stablecoins and real-world funds. Launched on January 6, 2026, TIP-20 is designed primarily for stablecoins however will also be used for different fungible belongings, together with bridged BTC or ETH.

Technically, TIP-20 is an extension of ERC-20. All normal ERC-20 capabilities, together with transfers, approvals, and steadiness checks, work with out modification. On prime of this baseline, TIP-20 provides options required for fee techniques working at scale, together with:

• Switch memos for reconciliation
• Constructed-in compliance and coverage enforcement
• Function-based operational controls
• Native reward and yield distribution

This strategy permits builders and issuers to depend on a standardized onchain primitive somewhat than constructing customized logic for every stablecoin deployment.

Why Tempo Constructed a Funds-First Token Commonplace

Tempo was created to deal with structural limits in current blockchains used for funds. Whereas networks akin to Ethereum and Solana assist stablecoins, they weren’t designed round high-volume, low-latency fee flows or regulated monetary operations.

Tempo was incubated by Stripe and Paradigm and raised $500 million in 2025 at a $5 billion valuation, backed by companies together with Sequoia and Greenoaks. The community targets greater than 100,000 transactions per second with sub-second finality, predictable charges, and stablecoin-native design.

Stablecoins are actually used properly past peer-to-peer transfers. They assist treasury administration, cross-border settlement, and international change. Nevertheless, issuers face recurring challenges:

• Reconciling onchain transfers with off-chain accounting techniques
• Implementing jurisdiction-specific compliance guidelines
• Distributing yield or rewards transparently
• Sustaining predictable efficiency throughout high-volume fee durations

TIP-20 exists to standardize these necessities on the protocol stage.

How TIP-20 Extends ERC-20

ERC-20 established a shared language for fungible tokens, enabling wallets, exchanges, and purposes to combine belongings with out customized work. TIP-20 follows the identical philosophy, however applies it to payment-focused stablecoins.

Key extensions embody:

Backward Compatibility

TIP-20 inherits all ERC-20 performance. Current instruments, wallets, and good contracts can work together with TIP-20 tokens with out modification, reducing integration threat.

Cost Lanes and Predictable Charges

Tempo offers devoted fee lanes and reserved blockspace for fee transactions. TIP-20 tokens routinely entry these lanes, making certain constant throughput and predictable charges in periods of excessive demand.

Versatile Payment Funds

Any USD-denominated TIP-20 stablecoin can be utilized to pay transaction charges on Tempo. A protocol-level Payment AMM converts charges to validators’ most well-liked belongings. Assist for non-USD stablecoins is deliberate.

Core Options of the TIP-20 Commonplace

Native Forex Identifier

TIP-20 helps an elective foreign money identifier that specifies the fiat foreign money backing the token, akin to USD or EUR. This allows appropriate pricing, routing, and settlement on Tempo’s native DEX and future onchain FX markets.

Switch Memos for Reconciliation

Every TIP-20 switch can embody a memo subject, permitting bill numbers, fee references, or inner IDs to journey with the transaction. This characteristic is important for enterprises integrating stablecoin funds with ERP techniques or SWIFT-compatible fee engines.

Reward and Yield Distribution

TIP-20 contains an opt-in reward distribution system. Issuers can distribute yield or incentives straight onchain, both as claimable balances or routinely forwarded rewards. This helps interest-bearing stablecoins with out guide calculations or off-chain reconciliation.

Customized Coverage Registries

Compliance is enforced by means of customized coverage registries, together with blocklists and whitelists. These registries might be shared throughout a number of tokens, lowering duplication and making certain constant regulatory compliance.

Operational Controls

Issuers can pause or unpause transfers, implement provide caps, and execute emergency halts. These controls present safeguards required by regulated issuers and monetary establishments.

Function-Based mostly Entry Management

TIP-20 defines roles for minting, burning, pausing, and administrative actions. Roles might be granted or revoked with out redeploying contracts, bettering operational safety.

TIP-20 as a Basis for Cost-Targeted Stablecoins

TIP-20 is designed to assist customized stablecoins tailor-made to particular monetary workflows.

Company Treasury Administration

Enterprises can challenge inner or regulated stablecoins to allow prompt fund transfers between subsidiaries. Reward distribution permits the automated sharing of reserve revenue with out off-chain bookkeeping.

Cross-Border Funds

Smaller banks and fee suppliers can bypass correspondent banking networks. Switch memos allow stablecoin funds to combine with current reconciliation techniques for cross-border settlements.

Wholesale Settlement and Deposit Tokens

Coverage registries enable permissioned stablecoins for bank-to-bank settlement. Switch guidelines are enforced on the token stage to assist regulated wholesale fee techniques.

Curiosity-Bearing Stablecoins

Yield distribution is dealt with natively. Issuers can programmatically share returns with customers and intermediaries in actual time.

Non-USD Stablecoins and Onchain FX

TIP-20 helps non-USD currencies by means of native foreign money identifiers. Tempo’s DEX permits stablecoin-to-stablecoin swaps and future onchain international change.

A sensible instance is EURAU, a regulated euro stablecoin designed for European corporates that require compliance, privateness, and predictable settlement.

Infrastructure Companions and Ecosystem Assist

TIP-20 launched with assist from infrastructure suppliers together with AllUnity, Bridge, and LayerZero. These companions are rolling out TIP-20 compatibility for issuance and bridging.

LayerZero permits current belongings to increase into TIP-20, making certain they’re usable inside Tempo’s fee ecosystem from launch. Tempo’s broader ecosystem contains integrations with wallets, developer tooling, and liquidity suppliers.

Builders can deploy TIP-20 tokens through the Manufacturing unit contract utilizing the reference Solidity implementations in Tempo’s documentation. No further packages are required as a result of full EVM compatibility.

Conclusion

TIP-20 is a purpose-built token normal designed for stablecoins utilized in funds, settlement, and treasury operations. By extending ERC-20 with reconciliation instruments, compliance enforcement, and native reward distribution, it addresses gaps which have restricted stablecoin adoption in regulated monetary environments.

On Tempo, TIP-20 capabilities as a foundational fee primitive, enabling customized stablecoins, predictable charges, and multi-currency assist with out bespoke engineering. Its long-term relevance will rely on issuer adoption, regulatory alignment, and the community’s potential to ship on throughput and reliability. As stablecoins proceed to maneuver into enterprise and institutional use, requirements like TIP-20 outline how these belongings function at scale.

Sources:

• Tempo Docs: Overview of the TIP-20 normal
• X Publish: Tempo Announcement introducing the TIP-20 Commonplace
• Blockworks: Tempo $500M Sequence A Funding Spherical
• Tempo Weblog: TIP-20 normal for Funds