Wall Street's closed blockchains are a "race to the bottom": opinion of the head of Etherealize
Recently, Wall Street has seen a troubling trend: major financial institutions are increasingly turning to closed blockchain networks with restricted access. However, in my view, this path leads the industry into a dead end, fragmenting liquidity and reviving the isolation that distributed ledger technology was supposed to eliminate.
Vivek Raman, co-founder and CEO of Etherealize, in his recent analysis harshly criticized this trend, calling it a "race to the bottom." According to him, consortium networks do not interact with each other, undermining two key advantages of blockchain: system interoperability and liquidity concentration. Instead of creating new isolated silos, we should build privacy and access restrictions on top of public infrastructure.
Public base layer versus "consortium chains 2.0"
Etherealize consistently promotes Ethereum as an open base layer for institutional players. Raman draws an analogy with HTTP and HTTPS: Ethereum is the foundation, while additional layers with restricted access and privacy are the overlay, which is more logically implemented at the application or L2 solution level rather than spawning separate closed networks. This position appears technically sound, as it preserves the network effects of the public blockchain while simultaneously meeting the requirements of regulators and corporate clients.
Examples of the latest wave of such "closed" solutions include Canton Network from Digital Asset, the Arc project from Circle, and Tempo from Stripe. Raman rightly reminds us that we have been through this before: the R3 interbank initiative and the Hyperledger corporate ecosystem, actively promoted since 2016, never achieved mass adoption. The lessons of the past, it seems, have not been learned.
"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 it is hard to argue with that. In June, he already noted that traditional financial organizations had begun integrating Ethereum-based solutions into real business processes, confirming the viability of open systems.
My conclusion: the market is making the same mistake again, trying to "tame" blockchain through closed sandboxes. However, it is precisely open networks, such as Ethereum, that offer the scalability and liquidity that will ultimately determine the winners in the institutional race. Closed chains are merely a temporary solution that will not stand the test of time.