Wall Street's closed blockchains are a "race to the bottom": Etherealize's head explains why isolation is destroying the industry
Recently, a troubling trend has emerged on Wall Street: major financial institutions are increasingly turning to closed blockchain networks with restricted access. However, in my firm conviction, this path leads to a dead end. Vivek Raman, co-founder and CEO of Etherealize, a company focused on integrating Ethereum into traditional finance, has harshly criticized this practice, calling it nothing less than a "race to the bottom."
Fragmentation Instead of Consolidation
The essence of Raman's criticism is that consortium networks created by banks and corporations fragment liquidity and return us to the isolated systems that distributed ledger technology was supposed to eliminate. Closed loops do not interact with each other, undermining two key advantages of blockchain: system interoperability and liquidity concentration. Instead of a unified global market, we get scattered "digital fortresses."
Architecture of the Future: Public Base Layer
The key thesis of Etherealize's position is that privacy and access restrictions should not be a property of the blockchain itself. It is more logical and efficient to build them on top of open public infrastructure—at the level of applications or second-layer solutions (L2). Raman draws a compelling analogy: in this model, Ethereum acts like HTTP—a global open protocol—while additional layers with access rights and encryption act like HTTPS, which provides security on top of the base standard. This approach preserves interoperability and network effects without sacrificing confidentiality.
As negative examples of "consortium chains 2.0," he cites Canton Network from Digital Asset, Circle's Arc project, and Stripe's Tempo payment network. Raman rightly reminds us of the sad fate of previous similar initiatives—the interbank platform R3 and the corporate ecosystem Hyperledger, which were actively promoted since 2016 but never achieved widespread 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. It is worth noting that back in June, Raman stated that traditional financial organizations had begun integrating Ethereum-based solutions into real business processes, signaling a paradigm shift from experiments to practical use.
My analysis: Raman's position is not merely a defense of Ethereum's interests but a strategically sound vision for the development of the entire industry. Closed networks are a step backward to the archaic model of centralized databases with blackjack and cryptography. Institutional players who choose isolation today risk being left behind tomorrow when the market finally consolidates around open, interoperable protocols. The only question is how much time and capital will be wasted on dead-end branches of evolution before everyone realizes this.