Wall Street's closed blockchains — a "race to the bottom": Etherealize CEO raises the alarm
The financial mainstream has once again become enamored with the idea of private blockchains with restricted access, but this is a dead-end path that fragments the market and destroys the very essence of the technology. Such is the verdict delivered by Vivek Raman, co-founder and CEO of Etherealize, a company specializing in integrating Ethereum into the institutional environment.
In his latest assessment of the situation, Raman directly calls what is happening a "race to the bottom." In his view, the consortium networks that major Wall Street players are now actively promoting represent a step backward toward the isolated systems that blockchain was originally meant to move away from. The main problem with such closed loops is the lack of interoperability. They do not interact with each other, which undermines two key advantages of distributed ledgers: system compatibility and the pooling of liquidity.
Etherealize's position is crystal clear: Ethereum should become the open base layer for institutions. According to Raman, privacy and access control are more logically implemented at the upper levels—in applications or L2 solutions—rather than building separate closed networks from scratch. He draws an eloquent analogy: Ethereum is HTTP, the foundation of the common network, while private layers are HTTPS, which adds security on top without breaking the architecture.
Ghosts of the Past
Raman reminds us that we have already been through this stage. The wave of "consortium chains 2.0," represented by Canton Network from Digital Asset, the Arc project from Circle, and the recent launch of Tempo from Stripe, is frighteningly reminiscent of the failed initiatives of the past decade. This refers to the interbank platform R3 and the corporate ecosystem Hyperledger, which were aggressively promoted starting in 2016 but never achieved real large-scale development.
"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.
Interestingly, back in June, Raman noted that traditional financial organizations had begun implementing Ethereum-based solutions into real business processes, moving from experiments to practice. However, the current trend toward closed networks raises serious concerns for him.
My take: Raman's criticism is absolutely justified, especially regarding liquidity. The history of R3 and Hyperledger has clearly shown: closed consortia die due to the lack of network effects. By trying to control everything, they lose the most important thing—the value that is born only in an open and interconnected ecosystem. The only question is whether Wall Street will hear this signal before spending billions on yet another dead-end project.