Wall Street's closed blockchains are a "race to the bottom": Etherealize CEO exposes the industry's main problem
In recent months, we have been witnessing a troubling trend: the largest financial institutions are increasingly turning to closed blockchain networks with restricted access. However, as the co-founder and CEO of Etherealize, Vivek Raman, rightly points out, this path leads not to progress but to a dead end of fragmentation.
The Problem with Consortium Networks
Raman calls this wave a "race to the bottom." The closed circuits created by banks and corporations do not interact with each other, which undermines two fundamental advantages of distributed ledger technology: system interoperability and liquidity concentration. Instead of a unified global market, we risk ending up with an archipelago of isolated "digital fortresses."
It is critical to understand: consortium networks do not solve the privacy problem; they merely mask it. They return us to the very isolated systems that blockchain was supposed to eliminate.
Ethereum as an Open Base Layer
Etherealize consistently promotes Ethereum as open infrastructure for institutional players. Raman insists: privacy and access restrictions are more logically built on top of a public network—at the application or L2 solution level—rather than by proliferating separate closed networks. He draws an elegant analogy: Ethereum is HTTP, and additional layers with restricted access are HTTPS. No one thinks of creating a "private internet" for banks.
Among the examples of the latest wave of "closed" solutions are Canton Network from Digital Asset, the Arc project from Circle, and Tempo from Stripe. Raman calls these "consortium chains 2.0," recalling the fate of the R3 initiative and the Hyperledger corporate ecosystem, which were actively promoted starting in 2016 but never achieved widespread adoption.
"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.
My View on the Situation
Raman's position is absolutely justified. History shows that closed corporate blockchains are a dead-end branch of evolution. They provide neither network effects nor real decentralization. Institutional players seriously considering a long-term strategy should take a closer look at open protocols. In June, Raman already stated that traditional financial organizations have begun integrating Ethereum-based solutions into real business processes—and that is a far more promising signal than yet another pilot project on closed networks.