When Payments Own the Base Layer: What Corporate L1s Mean for L2s — and for Africa v2.0

Table of Contents

• TL;DR

• The spark (and why I’m writing this)

• Baseline: what L2s actually do today (so we measure impact correctly)

• Why payments firms might go L1 (and not just “use an L2”)

• Africa lens: what could really change (and what won’t)

• Scenarios, not predictions (how big could the shift be?)

• Dollarization pressure vs domestic units (cNGN, etc.)

• Risks & trade-offs (clear-eyed, not alarmist)

• Who wins / who loses (by segment)

• What to watch (so this doesn’t devolve into vibes)

• 90-day action plan (operators & builders)

• Pushback corner, quick answers to big doubts

• Conclusion: track the metrics, not the memes

• Sources & methods (selected)

TL;DR

• Circle just announced Arc, a stablecoin-native Layer-1 (USDC as gas; EVM-compatible) with private testnet in weeks, public testnet this fall, mainnet beta in 2026. (Circle)

  Circle wants USDC to be the engine and the fuel.

• Fortune reports Stripe is building “Tempo,” a payments-first L1 with Paradigm; it’s stealth and Ethereum-compatible. Not officially confirmed beyond the report and subsequent coverage. (Fortune, CoinDesk)

  Stripe may move from using blockchains to running one.

• Today, Ethereum L2s carry ~10× L1’s transaction throughput by user-ops, with Base, Arbitrum, and OPleading; Arbitrum ~$19.2B TVS, Base ~$15.8B. (L2BEAT)

  Today’s crypto “busy streets” are L2s, not L1s.

• Stablecoins settled >$12T in 2024 and are on track for much more in 2025, the real prize isn’t “users” but dollar settlement at scale. (5264302.fs1.hubspotusercontent-na1.net)

• For Africa: this could lower remittance and B2B costs and normalize USD rails—but raises centralization, compliance gating, and dollarization risks. SSA’s average remittance cost is still ~8.37%; any new rail must beat that. (Business Insider Africa)

  Faster, cheaper money, if the rules and partners line up.

The spark (and why I’m writing this)

A founder described this event, when it was announced, as “9/11 for L2s.” I don’t endorse that phrasing, but I get the sentiment: when payments companies start owning the base layer, incentives and gravity change. Circle is bringing USDC into the substrate with Arc; Fortune says Stripe is quietly building Tempo. This isn’t “just another chain.” It’s a bid to vertically integrate settlement, fees, FX, and compliance in one place. (Circle, Fortune)

In other words, the companies that move money want to own the road, not just drive on it.

Baseline: what L2s actually do today (so we measure impact correctly)

• Throughput: Over the last year, L2 user-ops per second ≈ 10.2× Ethereum L1. In plain English: most activity by count has moved to L2s. Base currently tops the board by activity. (L2BEAT)

• Capital: Arbitrum ≈ $19.18B TVS, Base ≈ $15.76B, OP Mainnet ≈ $3.89B (rolling 1-year window). (L2BEAT)

L2s exist to scale existing L1s: cheaper fees, higher throughput, and a familiar developer toolchain. This is why people are anxious: L2s are where devs ship and where users click, they are express lanes bolted onto a busy highway.

Why payments firms might go L1 (and not just “use an L2”)

Control and predictability. If you run the base layer, you can:

• Compress the fee stack (less paid “up the chain”).

• Ship native stablecoin gas (Arc: USDC for fees) and sub-second finality tuned for merchant UX.

• Bake in compliance primitives and FX (KYCable on/off-ramps, programmable rules, fiat pairs).

• Reduce vendor ambiguity for enterprises (one throat to choke). (Circle)

Stripe’s reported Tempo fits the same logic: own the moment of settlement for stablecoin payments instead of renting it. It’s cheaper, simpler, and safer (for them) if they run the whole stack. Depending solely on L2s means inheriting upstream fees, governance timelines, and bridge risks. A bespoke L1 reduces those dependencies. If you rent your rails, your landlord sets the rules.

That said, it’s stealth, we have a Fortune report and secondary coverage, not official docs. Treat it as directional, not done. (Fortune, CoinDesk)

Africa lens: what could really change (and what won’t)

Let’s talk about costs and speed. Sub-Saharan Africa remains the most expensive region for remittances: ~8.37% average to send $200 (Q2 2024). If Arc (and possibly Tempo) land credible partners in-country and squeeze spreads with stablecoin-native FX, corridors like NG↔UK/EU or KE↔GCC could finally see structural cost drops and near-instant settlement. That’s the bar. (Business Insider Africa)

You’ll see trials first, not instant miracles. If the pipes connect, sending money could get cheaper and quicker.

As for Rails we already use. Stablecoins are not theoretical here. Nigeria alone saw ≈$59B in crypto inflows (Jul 2023–Jun 2024), with stablecoins a top use case for remittances, savings, and commerce. Corporate L1s will try to formalize what people already do informally. (Chainalysis)

Local infrastructure players. Providers like Blockradar (wallet-as-a-service for stablecoins) and Paycrest(decentralized liquidity/payments network) are the last-mile glue. If Arc/Tempo become default rails, these players either (a) abstract and localize them for banks/fintechs (KYC, payouts, reconciliation), or (b) get disintermediated if corporate L1s ship turnkey SDKs plus local bank partnerships. My bet: Africa still needs local abstractions to connect to Naira/KES/mobile-money reality. (blockradar.co, Mariblock)

The winning play is being the easy adapter, not another chain.

Policy direction. Nigeria has been signaling openness to regulated stablecoin businesses under the new Investment and Securities Act 2025; Kenya’s VASP Bill (2025) is progressing in Parliament. Translation: on/off-ramps will tighten and formalize. That’s good for enterprise adoption, but it also raises the compliance bar for users. (Cointelegraph, parliament.go.ke)

Scenarios, not predictions (how big could the shift be?)

The target isn’t “daily active users”, it’s settlement volume. Stablecoins settled >$12T in 2024 across chains; 2025 is tracking higher. If Arc (and later Tempo) captured even a single-digit share of settlement over time, that’s hundreds of billions annually flowing on corporate L1s, with some of that migrating from L2s, some from L1, and some from non-ETH chains. (Cannibalization won’t be L2-only.) (5264302.fs1.hubspotusercontent-na1.net)

A small slice of a huge pie is still enormous, and it won’t come only from L2s.

In numbers, here’s a conservative scenario using a $12T annual stablecoin-settlement baseline (2024).

Assumption: Global stablecoin settlement ≥ $12T in 2024 (Coin Metrics). This is scenario math, not a prediction.

What decides the number?

• Who onboards the banks/PSPs/MTOs in NG, KE, GH, ZA.

• FX quality and fee transparency (does it actually beat today’s ~8% benchmarks?).

• Exchange listings and market-maker depth (liquidity follows incentives).

• Bridges and CCTP-like mechanisms to move balances in/out safely. (Circle)

Partners, prices, and liquidity decide winners.

Dollarization pressure vs domestic units (cNGN, etc.)

Dollar rails are sticky because they solve inflation and FX pain. But cNGN, a Naira-pegged stablecoin from the Africa Stablecoin Consortium operating with CBN oversight via sandbox, is an attempt to digitize NGN and keep commerce in local units where appropriate. It can ease dollar pressure if it achieves real acceptance, corridor liquidity, and easy conversion to/from USD stables in compliant venues. Otherwise, users default to USDC/USDT for depth. (Mariblock, Securities and Exchange Commission)

Net-net: If Arc’s FX and partner stack support cNGN↔USDC cleanly (and similarly for KES/ZAR-pegs), domestic units could coexist with dollar rails instead of being crowded out. That’s a design choice, not a given. (Circle)

Good plumbing lets naira and dollars live side by side.

Risks & trade-offs (clear-eyed, not alarmist)

• Centralization & freezing risk. Corporate L1s and centrally issued stablecoins can freeze or block addressesunder orders. That’s essential for compliance, but it’s also exclusion risk for high-friction jurisdictions. (You’re trading censorship-resistance for predictability.) Safer for institutions, but some users can be switched off.

• Liquidity bootstrapping. Even with USDC as gas, Arc must win market-makers, listings, and DeFi venues; Stripe’s Tempo is even earlier. Until liquidity is deep, the UX won’t match the theory. (Circle, Fortune)

  Empty malls look great on paper.

• Bridge and fragmentation risk. Moving value across multiple chains creates attack surface. CCTP-style systems help, but operational risk doesn’t vanish. (Circle)

• Policy chokepoints. Real benefit requires licensed on/off-ramps in-country. Nigeria and Kenya are moving, but policy implementation matters more than headlines. Without legal doors in and out, the highway is a dead end. (Cointelegraph, parliament.go.ke)

Who wins / who loses (by segment)

• Enterprise fintechs & banks in Africa: Win if they integrate early and pass savings to users; lose if they stall and let shadow channels own the rails. Move first, or play catch-up later.

• L2s: Lose some payments settlement over time if corporate L1s nail UX + compliance; still win on DeFi/experimentation and as middleware for other use cases. L2s won’t die; they’ll specialize.

• Local infra (Blockradar, Paycrest, etc.): Win by abstracting Arc/Tempo for local compliance and payouts. Lose if they try to compete with base-layer SDKs instead of complementing them. (blockradar.co, Mariblock)

  Be the plug, not the socket.

• Users: Win on speed and (hopefully) cost; risk hard KYC gating and freezing in edge cases. Faster and cheaper, inside a tighter rulebook.

What to watch (so this doesn’t devolve into vibes)

1. Milestones: Arc public testnet (fall 2025), mainnet beta (2026); any named African partners (banks, MTOs, PSPs). Official Stripe/Tempo confirmation. (Circle, Fortune)

   Dates and logos, not vibes.

2. Benchmarks: World Bank RPW for SSA corridors, we want sustained drops from ~8% toward <5%. (Remittance Prices Worldwide)

   If fees don’t drop, nothing changed.

3. Share shifts: L2 activity share and TVS (L2BEAT), plus stablecoin settlement share by chain (Coin Metrics / Visa Onchain). (L2BEAT, 5264302.fs1.hubspotusercontent-na1.net)

   Follow the money, not the tweets.

90-day action plan (operators & builders)

• Pilot a corridor. Pick one high-volume route (e.g., NG↔UK) and run a sandbox: stablecoin collection → FX → local payout. Measure all-in cost (including spread), settlement time, reconciliation errors.

  Test a lane before rebuilding the highway.

• Abstract the base layer. Whether it’s Arc or an L2, build behind a rail-agnostic interface so you can swap infra as liquidity/fees change.

  Don’t hard-code a winner yet.

• Compliance first. Align early with Nigeria’s SEC posture and Kenya’s VASP bill trajectory; secure KYC/AMLprocesses and audit trails now. (Cointelegraph, parliament.go.ke)

  Paperwork first, then scale. You know what happens if you do not do so, ask those before you.

• Merchant UX. Don’t ship “crypto.” Ship predictable receipts, chargeback policies, support SLAs, and Ledger-like clarity on fees.

  Sell outcomes, not chains.

Pushback corner, quick answers to big doubts

“Will L2s die?”

No. They’ll likely lose some payments settlement if corporate L1s deliver, but L2s still dominate on throughput and remain fertile ground for apps and experiments. Less Visa, more App Store, as at today. (L2BEAT)

“Isn’t this just marketing?”

Arc has concrete timelines and design choices (USDC gas, FX, EVM). Tempo is still a reported project; all of this as at press time, so treat it as speculative until Stripe goes on-record. Believe shipping code, not press. (Circle, Fortune)

“Will this actually help Africa’s costs?”

Only if licensed partners enable fiat legs and FX spreads compress. The yardstick is the World Bank RPW. Tech helps, policy and partners decide. (Remittance Prices Worldwide)

“What about cNGN?”

It’s real and progressing under a sandbox/oversight model; impact depends on acceptance and liquid FX paths with USD stables. Utility beats branding. (Mariblock, Securities and Exchange Commission)

Conclusion: track the metrics, not the memes

This isn’t an obituary for L2s; it’s a re-segmentation of the stack. If payments giants own the base layer for stablecoin settlement, some flows will consolidate where fees, FX, and compliance live natively. For Africa, that could mean cheaper, faster, more predictable rails, or just new chokepoints if execution and policy stall. The next 6–18 months will tell. I’ll be watching Arc’s partner map, Tempo’s confirmation, RPW costs, and where stablecoin settlement actually lands. This can be a win, but only if pipes, partners, and policy line up. (Circle, Fortune, Remittance Prices Worldwide, 5264302.fs1.hubspotusercontent-na1.net)

Sources & methods

• Circle: Arc announcement and timelines. (Circle)

• Stripe/Tempo: Fortune report; subsequent coverage. (Fortune, CoinDesk)

• L2 metrics: L2BEAT activity (UOPS scaling factor) & value secured snapshots. (L2BEAT)

• Stablecoin settlement: Coin Metrics (>$12T in 2024; higher in 2025). (5264302.fs1.hubspotusercontent-na1.net)

• SSA remittance costs: World Bank RPW; Q2 2024 SSA average 8.37%. (Remittance Prices Worldwide, Business Insider Africa)

• Nigeria adoption: Chainalysis Nigeria ~$59B (’23–’24). (Chainalysis)

• Policy: Nigeria SEC stance and ISA 2025 signals; Kenya VASP Bill (official PDF). (Cointelegraph, parliament.go.ke)

• Local rails: Blockradar (site); Paycrest (founder interview). (blockradar.co, Mariblock)