Welcome to The Protocol, CoinDesk’s weekly roundup of the most important stories in cryptocurrency technological development. I’m Margaux Nijkerk, CoinDesk reporter.
In this number:
- Stripe-Backed Blockchain Tempo Starts Testnet; Kalshi, Mastercard and UBS added as partners
- ZKsync Lite to close in 2026 as Matter Labs moves forward
- Blockstream Connects Lightning and Liquid for Faster Private Bitcoin Payments
- Axelar presents AgentFlux to incorporate AI agents into the chain, without cloud risks
Network news
STRIPE’S TEMPO TEST NETWORK GOES LIVE: Tempo, a payments-focused blockchain backed by Stripe and cryptocurrency investment firm Paradigm, launched its public testnet, a key step in its effort to bring stablecoin payments into widespread use. Tempo also unveiled a list of additions to the network’s group of partners, including firm Klarna, prediction marketplace Kalshi, payments giant Mastercard and Swiss global bank UBS. They join a group of previous design partners such as Deutsche Bank, Visa, Shopify, OpenAI and Nubank. Initially introduced in September, Tempo is designed to handle high-volume financial transactions with low fees, instant finality, and native support for stablecoins. Now that the testnet is live, developers and corporate partners can start experimenting with real-world on-chain payments. The move fits into the latest trend of building blockchains for stablecoin payments as adoption of digital dollars soars globally. Currently a $300 billion asset class, stablecoins are projected to become an integral part of cross-border payment pathways with business-to-business (B2B), peer-to-peer (P2P), and card payments driving growth, according to a recent report from Keyrock and Bitso. Tempo aims to solve common problems in blockchain-based finance, such as network congestion and volatile transaction fees. The network charges about a tenth of a cent per transaction, payable in US dollar-denominated stablecoins and eliminating the need for a volatile gas token. — Krisztian Sandor Read more.
ZKSYNC LITE UNTIL SUNSET IN 2026: Matter Labs plans to stop using ZKsync Lite, the first iteration of its Layer 2 Ethereum network, the team said in a post on X over the weekend. The company framed the move, which took place in early 2026, as a planned sunset for an early proof of concept that helped validate its zero-knowledge cumulative design options before newer systems went live. ZKsync Lite, which debuted in 2020, was built for basic token transfers and took a back seat after the developers released ZKsync Era in March 2023, a more advanced zkEVM rollup, which now anchors the project’s broader ZK Stack roadmap. The Lite network will continue to operate for now, funds will remain secure and withdrawals to the Ethereum mainnet will still be available, the team said. A detailed migration plan and timeline for closure will be published next year. — Margaux Nijkerk Read more.
BLOCKSTREAM APP FEATURES ATOMIC RAY SWAPS: Blockstream has released an update to its mobile app that allows users to exchange between Bitcoin’s Lightning and Liquid networks, aiming to lower the barrier to entry for fast, private Bitcoin payments. A new version of the Blockstream Green app introduces support for trustless atomic swaps between Lightning and Liquid. The change allows users to pay Lightning bills directly from their Liquid bitcoin (LBTC) balances, avoiding the need to manage Lightning channels or maintain incoming liquidity, a process that can be technically challenging for many. Lightning is designed for instant bitcoin payments with low fees. Liquid, on the other hand, is a sidechain that offers confidential transactions and easier management of unspent bitcoin outputs (UTXO). By linking the two networks through atomic swaps, Blockstream attempts to give users the benefits of both without requiring deep technical involvement. The exchange process is done autonomously and is based on cryptographic hash locks, ensuring that both sides of the transaction are completed or neither. If something goes wrong, the funds are automatically returned to the original wallet. — Helena Braun Read more.
AXELAR INTRODUCES NEW PRIVACY AI FRAMEWORK: Axelar introduced AgentFlux, an open source framework designed to run AI agents locally while keeping private keys, trading strategies, and customer data out of the cloud, a pitch aimed squarely at institutions exploring on-chain finance and wary of privacy risks. Developed by Interop Labs, the team behind the Axelar network, AgentFlux allows financial companies to implement “agent” automation without sending sensitive information to external infrastructure, the company announced. The framework addresses one of the biggest frictions in AI-powered crypto operations: tool calling. Today, most agents rely on cloud-based models to decide which blockchain tools to invoke and how to structure transactions, which can unintentionally expose the very information institutions seek to protect. AgentFlux divides those tasks into two smaller specialized models: one for choosing the appropriate tool and another for generating the arguments to execute. According to the team behind Axelar, this setup improves the accuracy of tool calls by 46% in benchmarks, bringing on-premises models closer to the performance of larger cloud systems. – Margaux Nijkerk Read more.
In other news
- Superstate, a blockchain-focused financial technology company, launched a new platform that allows public companies registered with the US Securities and Exchange Commission (SEC) to issue shares directly on-chain to investors in Ethereum. Called the Direct Issuance Program, Superstate’s new initiative allows companies to raise capital by selling newly issued tokenized shares in exchange for stablecoins. Investors receive the tokenized shares immediately and the company’s shareholder records are updated in real time through Superstate’s SEC-registered transfer agent infrastructure. The first emitters are expected to come online next year, the firm said. The move comes as tokenization is gaining traction with financial institutions and other companies exploring blockchain rails to gain efficiency. In an interview last week, SEC Chairman Paul Atkins said tokenization could “reshape the financial system” in the coming years, underscoring how regulators are opening the door to blockchain as part of the next generation of market infrastructure. — Krisztian Sandor Read more.
- BitMine Immersion Technologies (BMNR), the Ethereum-focused digital asset treasury company, acquired 138,452 ether last week, accelerating an accumulation strategy that brought its total holdings to 3.86 million tokens, the company reported. At current ETH prices, last week’s acquisition is worth approximately $435 million. That’s a 156% increase from four weeks ago, when it added around 54,000 ETH, the firm noted, and is also higher than the haul of 97,000 and 70,000 tokens from the previous two weeks. The company also increased its cash holdings to $1 billion, up from $882 million the previous week. Including a small stash of bitcoin and a stake in Eightco Holdings (ORBS), the company’s total cryptocurrency and cash assets are worth $13.2 billion. The latest purchase increases BitMine’s share of the circulating supply of the second-largest cryptocurrency to over 3.2%, bolstering its position as the largest known ETH treasury. — Krisztian Sandor Read more.
Regulation and policy
- A Republican U.S. senator at the center of talks over the cryptocurrency market structure bill that is the industry’s top policy priority, Sen. Cynthia Lummis, said the White House resisted ethics language she discussed with Democrats. That left the Wyoming lawmaker as a middleman trying to satisfy her Democratic colleagues in bipartisan talks while convincing the White House to participate, she said at the Blockchain Association policy summit in Washington. Still, he believes negotiators should reveal their working draft before the end of the week and formally mark it next week. Lummis said she and Democratic Sen. Rubén Gallego had come up with language on ethics. While she was not explicit about the details, one of the sticking points for Democrats has been her demand that top government officials not be allowed to profit from the industry over which they have political authority, aimed primarily at President Donald Trump and his family’s crypto businesses. — jesse hamilton Read more.
- The second-largest U.S. teachers union urged the Senate to reconsider a cryptocurrency bill that it says puts the pensions of 1.8 million members at risk while doing little to combat fraud and corruption in the digital asset sector. In a letter dated December 8 obtained by CNBC, Randi Weingarten, president of the American Federation of Teachers (AFT), addressed the US Senate Banking Committee about the Responsible Financial Innovation Act, saying it “poses profound risks to the pensions of working families and the overall stability of the economy.” The proposal, which builds on a measure the House passed earlier this year, is co-sponsored by cryptocurrency allies Sen. Cynthia Lummis and Sen. Bernie Moreno, along with Senate Banking Committee Chairman Tim Scott. While the bill establishes a framework for overseeing digital assets, it also raises new questions about how regulators would treat tokenized securities, instruments that are not strictly cryptocurrencies. “The cryptocurrency legislation we have seen weighed by the committee over the past few months concerns us deeply,” Weingarten wrote. “It is as irresponsible as it is reckless. We believe that, if enacted, this bill has the potential to lay the groundwork for the next financial crisis… Beyond the threat to the retirement security of working families, the legislation the committee is considering does little to curb the illegal activity, fraud and corruption that continue to prevail in anonymous crypto markets,” he wrote. — Olivier Acuna Read more.
Calendar
- December 11-13: Solana Breakpoint, Abu Dhabi
- February 10-12, 2026: Consensus, Hong Kong
- February 17-21, 2026: EthDenver, Denver
- From March 30 to April 30. 2, 2026: EthCC, Cannes
- April 15-16, 2026: Paris Blockchain Week, Paris
- May 5-7, 2026: Consensus, Miami
