On August 12, fintech giant Tempo introduced a new product named Tempo Earn. The product permits fintechs to reward idle stablecoin balances held by users while retaining some of the return. The payroll platform Deel was given the honor of being the first deployment.
Significance of Tempo Earn and Laws Governing Stablecoins
Tempo Earn presents a unique workaround to the rules established by section 4(a)(11) of the GENIUS Act. The act currently forbids any authorized stablecoin issuer from paying holders any form of ultimate interest or yield through holding the token.
However, Tempo Earn sources its yield from alternative avenues that include tokenized money market funds, onchain lending, and institutional credit. The platform has the responsibility of choosing the assets and deciding how to split the rewards between the platform and its customers. Here, it’s crucial to note that the issuer never pays the holder. Instead, a lending protocol caters to that need.
Digital Dollar Launch by Deel
In June, Deel built the reference implementation and debuted DLUSD. This digital dollar was a part of Stripe’s complete stack: Open Issuance issued the token, Privy embedded wallets, and the process ended with Tempo’s settlement. At the heart of Tempo’s infrastructure are Morpho vaults that generate rewards. This move strategically ensured that millions of contractors worldwide can protect their earnings from depreciating in value immediately after landing.
Tempo’s Deel case study quotes Thierry Edde, Deel’s head of crypto saying, “Today we give them the infrastructure to change that: a dollar-backed balance within the platform they already use, rewards that accrue automatically, and a card to spend anywhere.”
North American Traction and International Influence
With specific exceptions, Deel processes payroll for over 40,000 businesses across more than 150 countries. It has a worker count pegged at 1.5 million according to a June release by Stripe.
Definitions, Regulation, and the Role of Outside Players
Crucially, DLUSD isn’t defined as a cryptocurrency but rather as a digital dollar voucher. It exclusively lives within Deel, consistently maintaining a $1 value, and can be converted back to USD. It’s only usable within the platform.
On the legislative side, there have been efforts to clarify some key terms. Regulators haven’t explicitly defined who counts as a stablecoins ‘holder,’ leaving room for interpretation. Additionally, they’ve worked tirelessly since 2026 to clarify the pass-through issue
Earlier this year, the OCC proposed a rule that would establish a presumption that an issuer pays interest if they have an agreement with a related third party that subsequently pays yield to token holders.
Availability Pool and Stablecoin Supply
The availability pool on Tempo is currently small. Approximately $29.9 million stablecoins are in the supply chain, up by 23.5% in the past week. The total locked value is around $14.4 million. Morpho Blue is the largest lending market on Tempo with approximately $6.9 million in deposits.
Future Prospects
Tempo introduced the privacy feature Zones to shield Earn balances and payout history from other network participants on March 18. As of August 3, the organization has revealed its plans to support BRSRV, a BlackRock announced money market fund that’s compliant with the GENIUS Act – potentially a revolutionary step for the fintech world.
