As autumn settles in, the discussions around budgeting and strategy have taken on new dimensions within corporate finance, particularly as enterprise CFOs begin to strategize for the year 2026. Unlike the seasonal layering up of college sweaters by students in New England, CFOs are metaphorically layering up with blockchain technology, exploring experimental sandboxes and full-scale production workflows based on its complex architecture.
Recently, HSBC made headlines by expanding its tokenized deposit service (TDS) to facilitate cross-border transactions, highlighting the real-world potential of distributed ledger technology for enterprises. This move signals a shift away from the previously inflated expectations surrounding blockchain, as regulatory frameworks clarify, and tangible use cases are on the verge of emerging.
For CFOs, the mission is clear: navigate the intricate layers of blockchain technology and evaluate how they fit within their broader financial strategies. The technical aspects of blockchain can be daunting, consisting of four primary layers—each integral to forming a modern financial infrastructure. These layers dictate various facets of enterprise operations, including cost structures, compliance risks, and strategic differentiation. The challenge for CFOs is not whether to embrace blockchain, but how to do so responsibly and strategically while being mindful of the associated risks.
Layer 0 forms the foundational infrastructure that facilitates interaction among multiple blockchains, akin to the broadband network driving the digital economy. Projects like Polkadot, Cosmos, and Avalanche enhance interoperability, allowing assets and data to flow seamlessly across different chains, which can be crucial for scalability and vendor relationships.
Layer 1 includes the blockchains themselves, such as Ethereum and Bitcoin, serving as the primary protocols for recording transactions. This layer represents a global accounting ledger, where CFOs must assess critical metrics like trust and cost. Engaging at this level introduces jurisdictional complexities, as blockchain operates across borders while corporate finance is often confined to specific regulatory frameworks. Issues such as asset recognition under various accounting standards and how digital assets are represented on balance sheets are yet to be fully resolved.
Layer 2 serves as a performance-enhancing solution, allowing transactions to be processed off the main blockchain and settled periodically. For CFOs, this layer transitions blockchain from theoretical benefit to practical application, particularly within complex supply chain networks that require efficient tracking of invoicing and payments without compromising security.
Layer 3 brings blockchain into the realm of business applications, featuring decentralized applications (dApps), smart contracts, and industry-specific solutions. This is where blockchain intersects with existing corporate systems like ERP and treasury management. It is also the layer most likely to generate competitive advantages, while simultaneously introducing operational risks.
To prepare for this landscape, CFOs need to recognize that blockchain adoption will take different forms within their organizations. One entity might engage at Layer 3 to enhance its supply chain management, while another could explore Layer 2 solutions for efficiency, leaving the Layer 4 interfaces to be managed by external vendors. Understanding this layered architecture equips CFOs with a framework to gauge their organization’s exposure and responsibilities within the blockchain ecosystem.
Taken as a whole, the blockchain stack is a valuable tool for CFOs to discern the strategic paths their organizations should pursue. With each layer carrying distinct risks and rewards, the role of the CFO evolves beyond mere financial stewardship to encompass a nuanced understanding of how technological choices impact overall financial performance. As blockchain technology continues to mature, it’s essential for finance leaders to engage proactively in this evolving landscape.
