As the sector’s innovative architecture for money movement matures beyond hype cycles and speculative tokens toward cross-border B2B payments and treasury management, a clearer, more operational question now faces the enterprise C-suite.
How exactly does this new digital financial infrastructure work, and how can enterprise finance leaders use it to move money better, faster and cheaper?
For chief financial officers and corporate treasurers, the answer lies not just in abstract innovation but in the layered structure of blockchain networks. These layers, known in technical terms as Layers 0 through 3, represent different parts of the blockchain stack, ranging from the underlying communication protocols to the interfaces that touch customers and enterprise resource planning (ERP) systems.
Circle, for example, on Tuesday (Aug .12) launched Arc, a new Layer 1 blockchain designed for institutional-grade stablecoin payments, foreign exchange (FX) and capital markets. Also on Tuesday, Nuvei announced it is employing stablecoin rails to expand its global money movement capabilities. On Monday (Aug. 11), news broke that Stripe is reportedly developing an entirely new blockchain in partnership with cryptocurrency-focused venture capital firm Paradigm.
The importance of understanding the taxonomy around these corporate-focused blockchains and their technical layers is becoming a boardroom imperative. Just as traditional finance evolved distinct but interlocking systems for messaging (SWIFT), settlement (ACH, Fedwire) and compliance (anti-money laundering and know your customer), blockchain layers map to similarly specialized functions, but with different speed, cost and composability profiles.
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This is the CFO’s emerging digital asset dictionary. PYMNTS can show you how to read it.
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The Blockchain Stack Explained for Finance Pros
At a high level, blockchain networks are built on four primary layers, each with distinct functions.
Layer 0 operates as the network backbone of blockchain ecosystems, functioning as the foundational protocol layer that connects independent blockchains through interoperability, consensus and data transfer. For CFOs, Layer 0 is akin to an enterprise WAN or the internet backbone: critical infrastructure enabling disparate systems to communicate. In a payments context, it can streamline reconciliation across geographies, blockchains and jurisdictions, creating a unified operational framework.
Layer 1 forms the base blockchain layer, managing transaction recording and core state changes such as balances and contracts. Leading examples include Ethereum, Solana, Bitcoin and now Circle’s Arc. For finance leaders, this is where stablecoins reside, making it the digital equivalent of Fedwire or SWIFT’s central ledger. In the context of USDC or EURC payments, Layer 1 systems enable the settlement of real monetary value, often in seconds, providing liquidity and certainty to corporate treasuries.
Layer 2 serves as the scalability engine, built atop Layer 1 blockchains to handle transactions off-chain before periodically settling them back on the base layer. This structure is designed for higher throughput, lower fees and improved efficiency. For CFOs, Layer 2 is a throughput turbocharger, making it ideal for high-volume, low-cost transactions such as international payroll or vendor micro-payments. Layer 2 can deliver cost reductions of more than 90% compared to Layer 1 settlement.
Layer 3 provides the application interface, linking smart contracts and blockchain infrastructure to user-facing tools like wallets, APIs, dashboards and ERP integrations. Examples include Fireblocks, Circle’s APIs, Chainlink and enterprise blockchain software development kits (SDKs).
From a CFO’s perspective, Layer 3 is where finance and engineering teams converge. It defines how seamlessly an ERP can issue a purchase order and trace it to real-time settlement, or how treasury teams can monitor on-chain liquidity, creating operational transparency across the enterprise.
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Strategic Questions for CFOs Exploring Blockchain Payment Rails
Blockchain’s layered architecture is not a bug; it’s a feature. Just as cloud computing abstracted servers, storage and applications into modular layers, blockchain is doing the same for value movement.
As these layers solidify, CFOs can approach blockchain not as a monolithic technology, but as a composable stack with differentiated trade-offs.
But abstraction demands literacy. CFOs who understand how each layer fits the digital asset dictionary will be best positioned to harness the benefits — lower transaction costs, faster working capital cycles and programmable compliance.
To ground the abstraction, take the example of a sample enterprise payment flow of a $50,000 purchase order (PO) for IT equipment, sourced across borders, paid in stablecoins and settled on-chain.
The PO issuance takes place first across Layer 3, when an ERP system like SAP triggers a PO using an integrated blockchain API (Circle or Fireblocks). A smart contract records the PO on-chain, with terms encoded such as payment conditions, counterparty wallet or invoice matching logic.
Next, funds are transferred to a Layer 2 escrow contract, minimizing fees. AML/KYC checks are triggered via Layer 3 compliance oracles (like Chainalysis or TRM), using Layer 2 programmability.
Upon delivery confirmation, the smart contract releases funds, settled in USDC on a Layer 1 like Arc, for example. Settlement is instant, auditable and compliant with embedded metadata.
Reporting and reconciliation happen across Layers 0 and 3, with Layer 0 protocols syncing transaction records across chains if multiple chains were used (e.g., multi-geo vendors). Layer 3 dashboards push reports to treasury systems, automatically logging FX, timestamps and counterparties.
