Wall Street's closed blockchains are a "race to the bottom": opinion of the head of Etherealize
In recent months, a worrying 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, which positions Ethereum as the base layer for institutional solutions, has called this trend nothing less than a "race to the bottom." And I fully agree with him.
The crux of the problem is that consortium networks created by banks and corporations fragment liquidity and return us to the isolated systems that distributed ledger technology was supposed to eliminate. Instead of a unified space for asset exchange, we get scattered "walled gardens" that do not interact with each other. This undermines two key advantages of blockchain: system interoperability and liquidity concentration.
Privacy on top of public infrastructure
Raman rightly points out that privacy and access restrictions are more logically implemented not at the level of a separate blockchain, but on top of open public infrastructure—for example, at the application or L2 solution level. He draws an elegant analogy: Ethereum should become a kind of "HTTP" for finance, with additional privacy layers serving as "HTTPS." No one thinks of creating a separate "closed internet" for banks, so why should we accept this in blockchain?
The latest wave of such projects—Canton Network from Digital Asset, Arc from Circle, and Tempo from Stripe—only confirms these concerns. These are "consortium chains 2.0" that repeat the mistakes of the past. It is enough to recall how ingloriously the R3 and Hyperledger initiatives ended, which were actively promoted since 2016 and 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," Raman emphasizes. And these are not just words: in June, he already noted that traditional financial organizations are beginning to integrate Ethereum-based solutions into real business processes.
My analysis: It is telling that even after all the market development cycles, we return to the fundamental debate between open and closed systems. However, the history of R3 and Hyperledger is a clear lesson: closed consortia die due to the lack of network effects. I believe that institutional players will ultimately understand that the true value of blockchain lies in openness and composability, not in attempts to recreate old financial walls in a new guise.