Wall Street's closed blockchains are a "race to the bottom": Etherealize CEO denounces consortium networks
Vivek Raman, co-founder and CEO of Etherealize, has sharply criticized Wall Street's growing infatuation with private, permissioned blockchains. In his view, this trend is not just misguided—it is dangerous for the entire industry.
Raman emphasizes that consortium networks, which major financial institutions are actively promoting, fragment liquidity and return us to isolated systems. This is precisely the isolation that blockchain was supposed to eliminate. He bluntly calls the new wave of such projects a "race to the bottom."
The key problem, according to the head of Etherealize, is that closed circuits do not interact with each other. This undermines two fundamental advantages of the technology: system interoperability and liquidity concentration. Instead of creating a unified space, we get fragmented "islands" that merely imitate blockchain.
Etherealize, for its part, positions Ethereum as an open base layer for institutional players. Raman insists that privacy and access control should be implemented at the application or L2 solution level, not by creating separate closed networks. He draws an analogy with the internet: Ethereum is HTTP, and additional layers with restricted access are HTTPS. No one thinks of building a separate "closed internet" for banks.
As vivid examples of "consortium chains 2.0," he cites Canton Network from Digital Asset, Circle's Arc project, and Stripe's recent Tempo. Raman reminds us that we have already been down this path: the R3 initiative and the Hyperledger enterprise ecosystem were actively promoted starting in 2016 but never gained serious traction. Current attempts, in his opinion, risk repeating the same fate.
"We have always maintained the position that a global, open permissionless infrastructure is necessary as the base layer," Raman stated. This is not just a philosophical stance but a pragmatic view of the future of finance: only open systems can provide the necessary scale and network effects.
It is worth noting that back in June, Raman argued that traditional financial organizations had begun integrating Ethereum-based solutions into real business processes. However, the current trend toward closed networks causes him serious concern.
My analysis: Raman's criticism is absolutely justified. Closed blockchains are an oxymoron that strips the technology of its core value. However, I would add that the problem runs deeper: consortium networks are often created not for efficiency but to maintain control over the client base and data. This is a strategic mistake that, in the long run, will lead to even greater market fragmentation and a loss to open protocols.