Wall Street’s closed blockchains — a “race to the bottom”: Etherealize CEO slams consortium networks
In recent months, a dangerous trend has emerged on Wall Street: major financial institutions are increasingly turning to closed blockchain networks with restricted access. However, in my deep conviction, this path leads to a dead end. Vivek Raman, co-founder and CEO of Etherealize, in his recent statement accurately characterized this trend as a "race to the bottom," and I fully agree with him.
Fragmentation Instead of Consolidation
The core of the problem is that consortium networks created by banks and corporations do not interact with each other. Instead of pooling liquidity and ensuring interoperability, they fragment the ecosystem into isolated "islands." This directly contradicts the fundamental principles of blockchain technology, which should eliminate intermediaries and create a unified economic space. We are returning to the model of closed systems that the industry has long tried to move away from.
Raman rightly points out that privacy and access control are tasks that should be addressed at the application level or through specialized second-layer (L2) solutions, rather than by creating separate infrastructure networks. He draws a brilliant analogy: Ethereum should be like HTTP—an open foundational protocol—while additional layers of security and privacy are like HTTPS, which operates on top without undermining the base.
Ghosts of the Past
It is especially telling that we have already been through this. Initiatives like R3 and Hyperledger, actively promoted since 2016, never managed to become the standard. Current projects—Canton Network from Digital Asset, Arc from Circle, and Tempo from Stripe—Raman rightly calls "consortium chains 2.0." They repeat the mistakes of their predecessors, offering closed loops where the market needs open infrastructure.
"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. This stance resonates with me: it is open networks that can provide the level of liquidity and network effects required for the large-scale adoption of institutional solutions.
Notably, back in June, Raman highlighted the shift of traditional financial organizations from experiments to real-world use of Ethereum. This confirms that the market is gradually realizing that the future lies in hybrid models, where public infrastructure serves as the foundation and privacy is ensured at the upper layers.
My view: closed networks are a dead-end branch of evolution. They solve short-term regulatory compliance issues but create long-term interoperability problems. Institutional players betting on isolation risk being left behind when the market ultimately consolidates around open standards.