Wall Street's closed blockchains — a "race to the bottom": Etherealize CEO exposes the main threat to liquidity
The financial elite is once again making the same mistake it did a decade ago. Vivek Raman, co-founder and CEO of Etherealize, sharply criticized Wall Street's growing enthusiasm for closed blockchains with restricted access during a recent interview. In his view, this trend is not evolution but degradation, leading the industry toward fragmentation and isolation.
Raman emphasizes that consortium networks, which major banks and corporations are now actively promoting, inevitably fragment liquidity. Instead of a unified global space, we get scattered "pockets" that do not interact with each other. This is a return to the very isolated architecture that blockchain was supposed to free the financial system from. He bluntly calls the new wave of such initiatives a "race to the bottom."
The key argument of the Etherealize head is that privacy and access control are not properties of the base layer but an overlay. It is more logical to build secure enclaves on top of public infrastructure, for example, at the application or L2 solution level. He draws a direct analogy with the internet: Ethereum is HTTP, a global open protocol, while HTTPS is the layer that adds encryption and security without breaking the foundation.
Vivid examples of "consortium chains 2.0" include Canton Network from Digital Asset, the Arc project from Circle, and the Tempo payment network from Stripe. Raman reminds us that we have already been down this path. The R3 interbank initiative and the Hyperledger corporate ecosystem, aggressively promoted since 2016, failed to become mainstream, bogged down in their own limitations.
"We have always maintained that a global, open permissionless infrastructure is necessary as the base layer," Raman stated, emphasizing that only such an approach ensures interoperability and liquidity concentration—the two main advantages of the technology.
Notably, as early as June, Raman claimed that traditional financial organizations had begun integrating Ethereum-based solutions into real business processes. This suggests that the market recognizes the benefits of open networks, but inertia and the desire to control everything still push institutional players toward creating closed sandboxes.
My analysis: Raman's criticism is absolutely justified. The problem with closed networks is not just liquidity but also the network effect. Without open interaction with other protocols, any consortium chain is doomed to the role of an expensive but useless intranet. The market will inevitably reach the point where public blockchains, such as Ethereum, become the de facto standard, while privacy issues will be addressed at the application level. Those who bet on isolation risk being left on the sidelines of progress.