Etherealize CEO: Wall Street's closed blockchains are a "race to the bottom"
A troubling trend is brewing in the industry: the largest financial institutions are once again turning to closed blockchain networks with restricted access. However, as I see it, this path leads to a dead end, and my position is shared by Vivek Raman, co-founder and CEO of Etherealize. He has openly stated that consortium networks are not evolution but degradation, which he aptly characterized as a "race to the bottom."
The crux of the problem, in my firm belief, lies in the fact that the closed circuits created by banks are unable to interact with each other. This not only fragments liquidity but also completely kills two key advantages of distributed ledger technology—system interoperability and capital concentration. We are returning to the very isolated systems that blockchain was supposed to free us from.
Public Foundation as the Only Path
Etherealize has consistently promoted Ethereum as the open base layer for institutional players. And here I fully agree with Raman: privacy and access restrictions should be an overlay, not the foundation. It is more logical to build them on top of public infrastructure—at the application or L2 solution level—rather than proliferating separate closed networks. Raman offers a brilliant analogy: in this paradigm, Ethereum is HTTP, and the additional layers with restricted access are HTTPS. You don't build a separate internet for banks; you simply encrypt data within the existing network.
The latest wave of such "closed" projects includes Canton Network from Digital Asset, Arc from Circle, and Tempo from Stripe. Raman rightly calls this "consortium chains 2.0." And he is absolutely correct in reminding us of the sad fate of their predecessors: the interbank initiative R3 and the corporate ecosystem Hyperledger, which were aggressively promoted starting in 2016 but never achieved real large-scale adoption.
"We firmly believe and have always held this position that a global, open permissionless infrastructure is necessary as the base layer," emphasized the head of Etherealize. Notably, back in June he argued that traditional finance had begun integrating Ethereum into real business processes, not just experimenting.
My analysis: Wall Street's attempts to build "their own" blockchain are a defensive reaction to a lack of understanding of the technology. They are trying to fit decentralization into their centralized business models. But the market has already shown that value lies in open networks with network effects. Those who build closed "walled gardens" risk being left behind when the time comes for real interoperability.