Wall Street's closed blockchains — a "race to the bottom": Etherealize CEO sounds the alarm
In recent months, a troubling trend has emerged on Wall Street: major financial institutions are increasingly turning to closed blockchain networks with restricted access. However, in my firm conviction, this path leads to a dead end. Vivek Raman, co-founder and CEO of Etherealize, sharply criticized this approach during a recent discussion, calling it nothing less than a "race to the bottom." And I fully agree with him.
Fragmentation Instead of Consolidation
The essence of Raman's objections is perfectly clear and well-founded. Consortium networks, created under the auspices of individual groups of banks or corporations, do not solve the problem—they create new ones. Instead of a unified space for exchanging assets and data, we get isolated "walled gardens" that do not interact with each other. This fragments liquidity and, critically, destroys the two main advantages of distributed ledger technology: interoperability and liquidity concentration. We are returning to archaic centralized systems, only with a blockchain facade.
Architecture of the Future: An Open Base Layer
Etherealize's position, which I share, is that privacy and access control should not be properties of the base blockchain itself. It is more logical and efficient to implement them at higher levels—in applications or through L2 solutions. Raman offers a brilliant analogy: Ethereum should become a kind of HTTP for the financial system, a universal communication protocol. Private and permissioned scenarios, meanwhile, are the HTTPS level, which provides security and confidentiality on top of an open standard. Proliferating separate closed networks means building parallel internets that can never communicate with each other.
The current wave of "closed" projects, including Canton Network from Digital Asset, Arc from Circle, and Tempo from Stripe, is essentially "consortium chains 2.0." We already went through this in 2016 with initiatives like R3 and Hyperledger, which never achieved widespread adoption. History is repeating itself, and that is regrettable. The head of Etherealize rightly reminds us that the base layer requires global, open permissionless infrastructure. This is the only path to creating a truly liquid and interconnected market.
My analysis confirms: while traditional finance continues to experiment with closed sandboxes, it is open networks like Ethereum that are gradually being integrated into real business processes. The outcome of this confrontation will determine whether blockchain becomes the foundation of a new global economy or remains merely an expensive tool for internal accounting for a few corporations.