Etherealize CEO: Wall Street's closed blockchains are a "race to the bottom"
Recently, a troubling trend has emerged on Wall Street: major financial institutions are increasingly turning to closed blockchain networks with restricted access. However, as I see it, this path leads to a dead end. Vivek Raman, co-founder and CEO of Etherealize, a company promoting Ethereum as the base layer for institutional players, has openly criticized this trend, calling it nothing less than a "race to the bottom."
The Problem of Liquidity Fragmentation
The essence of Raman's objections is perfectly clear and well-founded. Consortium networks created by banks and corporations are by nature isolated from one another. They do not interact with each other, which leads to the fragmentation of liquidity and brings us back to the very isolated systems that blockchain technology was supposed to move away from. Instead of creating a single global space for asset exchange, we are witnessing the revival of "digital fortresses" that undermine two key advantages of the technology: interoperability and liquidity concentration.
Raman insists on a fundamentally different approach. Privacy and access restrictions are tasks that should be addressed at the application level or through second-layer solutions (L2), rather than by creating separate closed networks. He draws an excellent analogy: Ethereum should be like HTTP—an open foundation—while additional privacy layers are like HTTPS, which operates on top of the existing protocol rather than instead of it.
Ghosts of the Past
As examples of this new wave of "closed" solutions, Raman cites Canton Network from Digital Asset, the Arc project from Circle, and Tempo from Stripe. He calls this "consortium chains 2.0," recalling the sad fate of previous similar initiatives. We already saw this in 2016 with the interbank project R3 and the corporate ecosystem Hyperledger, which 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. And I completely agree with him. It is precisely openness and the absence of permissions that are the main guarantors of network effects and sustainable ecosystem development. Notably, back in June, Raman argued that traditional financial organizations had begun integrating Ethereum-based solutions into real business processes, confirming the viability of this path.
My conclusion: betting on closed networks is a strategic mistake that, in the long run, will lead only to stagnation and inefficiency. It is time for institutional players to realize that the true value of blockchain lies in its openness and ability to unite, not divide.