Etherealize CEO: Wall Street's closed blockchains are a "race to the bottom"
A troubling trend is brewing in the industry: the largest banks and financial corporations are once again rushing to create isolated blockchain networks with restricted access. Vivek Raman, co-founder and CEO of Etherealize, called this trend a "race to the bottom" that destroys the very essence of distributed ledger technology.
The problem, in my deep conviction, is that the consortium networks now being actively promoted on Wall Street fragment liquidity and return us to the era of closed, mutually incompatible systems. It is precisely from this isolation that blockchain was supposed to free the financial world. Instead of a unified space, we get scattered "digital gardens" where each participant stews in their own juice.
Raman rightly points to two key advantages that this approach undermines: system interoperability and liquidity concentration. Closed loops do not interact with each other, and therefore do not create the network effect that makes open blockchains truly valuable. The model proposed by Etherealize looks far more logical: use the open base layer of Ethereum as the foundation, and build privacy and access restrictions on top—at the application or L2 solution level. The comparison with HTTP and HTTPS here is absolutely apt: the base infrastructure should be universal, while protection and confidentiality should be an overlay.
The latest wave of such "closed" initiatives—Canton Network from Digital Asset, the Arc project from Circle, and Tempo from Stripe—is not the first attempt, and that is alarming. We have already seen how the interbank initiative R3 and the corporate ecosystem Hyperledger, actively promoted since 2016, never gained proper traction. Calling this "consortium chains 2.0," Raman reminds us of the costly mistakes of the past that, it seems, no one wants to learn from.
"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 one cannot but agree with this. At the same time, it is worth noting that in June, Raman stated that traditional financial organizations are transitioning to real use of Ethereum in business processes. This is an encouraging signal, but it only underscores the contrast between real adoption and ostentatious activity in closed sandboxes.
My conclusion: Wall Street, trying to control every aspect of blockchain, risks killing the very innovation it seeks to monetize. Open networks with properly implemented privacy layers are the only path to a sustainable and scalable financial infrastructure of the future. Closed chains, on the other hand, are a dead-end branch of evolution, leading to a repetition of the mistakes of the past decade.