Wall Street's closed blockchains are a "race to the bottom": Etherealize CEO raises the alarm
Recently, a worrying trend has been observed on Wall Street: major financial institutions are increasingly turning to closed blockchain networks with restricted access. However, in my deep conviction, this path leads to a dead end. Vivek Raman, co-founder and CEO of Etherealize, in his recent analysis, outlined the problem with utmost clarity: such consortium initiatives are nothing less than a "race to the bottom."
Fragmentation Instead of Integration
The essence of Raman's criticism is extremely clear and well-founded. Closed corporate networks, created by banks and payment giants, do not interact with each other. Instead of pooling liquidity and creating a unified, interoperable ecosystem, they fragment the market into isolated "islands." This directly contradicts the very philosophy of blockchain, which was supposed to eliminate intermediaries and barriers, not create new ones. We are returning to models that the technology was meant to move away from.
Architecture of the Future: Public Base Layer
The key thesis of Etherealize, which I fully share, is that privacy and access control should not be a reason to create separate networks. Raman rightly draws an analogy with the internet: Ethereum is a base protocol, similar to HTTP, while solutions for ensuring confidentiality should be implemented at higher layers, like HTTPS. This approach preserves the openness, security, and network effect of a public blockchain, adding the features needed by institutional players at the application or L2 solution level.
Examples from the latest wave of "closed" projects—Canton Network from Digital Asset, Arc from Circle, and Tempo from Stripe—only confirm this trend. Raman aptly calls them "consortium chains 2.0," recalling the sad fate of their predecessors: the R3 initiative and the Hyperledger ecosystem, actively promoted since 2016, failed to achieve mass adoption. History is repeating itself, and this raises serious concerns.
"We firmly believe and have always held this position that a global, open permissionless infrastructure is necessary as the base layer," emphasizes the head of Etherealize. And these are not just words. As early as June, Raman noted that traditional financial organizations are beginning to move from experiments with Ethereum to real implementation in business processes, confirming the viability of open systems.
My verdict: Betting on closed networks is a strategic mistake that could cost the financial industry dearly. In the long term, the winner will be the one who can offer a solution that combines openness and interoperability with the privacy mechanisms required by business. Trying to isolate oneself means knowingly losing the global race for liquidity and innovation.