TIP-20: a token standard for payments

Date:

Jan 6, 2026

Author:

tempo team

Reading Time:

8 min

TIP-20 is Tempo's native token standard, designed for stablecoins and payment use cases. It extends ERC-20 with transfer memos, compliance controls, and reward distribution. Work with our infrastructure partners who are rolling out TIP-20 support, including AllUnity, Bridge, and LayerZero, or start building with TIP-20 using our docs.

Stablecoins are increasingly being used for real-world payments, settlement, and treasury operations. TIP-20 is Tempo's native standard for fungible tokens, designed from the ground up with these use cases in mind. It builds on ERC-20, the existing standard across Ethereum and EVM-compatible chains, and is fully backward compatible.

In a world of many stablecoins, each designed for different use cases, regulatory frameworks, and jurisdictions, the TIP-20 standard ensures tokens behave in a consistent and interoperable way.

Building a payments-focused framework for tokens

A token standard is a shared set of rules that defines how digital tokens behave. It provides a common framework so tokens can be created, integrated, and used consistently across the ecosystem.

ERC-20 is the most widely adopted example. It specifies core functionality like sending, receiving, and checking balances in a predictable format. This enables ERC-20 tokens to be traded on decentralized exchanges and integrated into DeFi protocols without custom integrations. The standard handles coordination upfront.

TIP-20 applies this same principle to stablecoins and payment tokens, extending the standard with features specific to real-world payments: transfer memos, compliance controls, and reward distribution.

TIP-20: a token standard built for payments

The TIP-20 standard is a foundational primitive in Tempo. Like Tempo Transactions, it brings real-world payments use cases onchain:

The TIP-20 standard enables the issuance of custom stablecoins tailored to specific payment use cases while meeting operational and compliance requirements.
To ensure high throughput and predictable fees, Tempo has dedicated payment lanes: reserved blockspace for payment transactions. Payment transactions using TIP-20 tokens automatically access these lanes for reliable, high-volume payments.
Any USD-denominated TIP-20 stablecoin can be used to pay transaction fees on Tempo. In the future, we plan to support paying fees in non-USD stablecoins.
TIP-20 tokens can be traded on Tempo's native decentralized exchange, which natively enables stablecoin-to-stablecoin swaps, and, in the future, onchain FX.

TIP-20 was designed with stablecoin issuers in mind

TIP-20 is designed to meet the operational, compliance, and distribution needs of stablecoin issuers. Beyond basic transfers, it provides built-in features for payment reconciliation, regulatory requirements, and issuer controls at scale. TIP-20 tokens:

🪙Native currency identifier

Support an optional currency identifier that specifies the real-world asset backing the token, when applicable.

📝Transfer memos

Enable transfers with payment references and invoice IDs attached to each transaction for easier reconciliation.

⭐Reward distribution

Offer an opt-in reward distribution system that allows issuers to distribute rewards to token holders or distributors.

🛡️Custom policy registries

Enforce compliance and regulatory requirements through custom policy registries, such as blocklists and whitelists.

⚙️Operational controls

Provide operational controls, such as pause and unpause functions for emergency halts.

👥Role-based access management

Implement role-based access management for operational and administrative roles, such as minting and burning privileges.

Although designed for stablecoins in mind, TIP-20 is a general-purpose fungible token standard. Assets like bridged BTC or ETH can use the same operational controls and native DEX integration.

We've partnered with infrastructure providers including AllUnity, Bridge, and LayerZero, who are rolling out TIP-20 to help accelerate your development.

The case for custom stablecoins

Stablecoins are moving beyond peer-to-peer payments into treasury management, settlement, and foreign exchange. Custom stablecoins built on TIP-20 can be designed for these specific use cases:

Corporate treasury management

Custom stablecoins can streamline global treasury operations, allowing funds to move instantly between subsidiaries. TIP-20's reward distribution enables reserve income to be shared across business units without complex off-chain accounting.

Cross-border payments

Stablecoins allow smaller banks and payment providers to participate in cross-border flows without correspondent banking networks. TIP-20's native transfer memos enable reconciliation between stablecoin transactions and existing payment engines that support SWIFT messaging.

Wholesale settlement and deposit tokens

Policy registries enable permissioned stablecoins and deposit tokens for bank-to-bank settlement. Issuers can enforce transfer rules directly at the token level, supporting regulated and wholesale payment systems.

Interest-bearing stablecoins

TIP-20 simplifies interest-bearing stablecoin issuance with native yield distribution. Issuers can programmatically share yield with users and intermediaries in real time, eliminating manual calculations and off-chain reconciliation.

Non-USD stablecoins and onchain FX

A global stablecoin ecosystem requires currencies beyond USD. TIP-20 tokens include an optional currency identifier specifying the fiat currency they represent. Tempo's native DEX will enable onchain foreign exchange between stablecoins.

All of these capabilities are built into TIP-20, so issuers can use a proven implementation rather than building core stablecoin logic themselves.

Start building with TIP-20

Whether you're exploring stablecoins or already use them in your payment stack, we can help you get started:

Learn the fundamentals

Visit the Learn section of the Tempo documentation to understand stablecoins, how they work, and the payment use cases they enable.

Learn

Start building

If you're familiar with blockchain development, head to our docs to connect to Tempo, access test funds, download SDKs, and start building with TIP-20.

Docs

Move faster with partners

You can also work with our infrastructure partners who are integrating TIP-20, including AllUnity, Bridge, LayerZero, and more to help accelerate your development timeline. Visit the Ecosystem section to explore Tempo's growing network of partners.

Ecosystem

For guidance on choosing the right approach for your use case, reach out to us at partners@tempo.xyz.