Wall Street's closed blockchains — a "race to the bottom": Etherealize CEO accuses consortia of fragmenting liquidity
In recent months, Wall Street has once again turned its attention to private blockchain networks, but this trend is drawing serious criticism from leading industry players. Vivek Raman, co-founder and CEO of Etherealize, in a recent interview called the growing popularity of consortium networks with restricted access a "race to the bottom" that undermines the fundamental principles of distributed ledger technology.
In my deep conviction, this criticism is absolutely justified. Consortium networks created by major banks and corporations inevitably fragment liquidity and return us to the isolated systems that blockchain was supposed to eliminate from the financial world. Instead of a unified ecosystem, we get scattered "walled gardens" that are unable to interact with each other.
Privacy should not mean isolation
Raman emphasizes that closed loops undermine two key advantages of the technology: system interoperability and liquidity concentration. Instead of proliferating separate closed networks, he proposes building privacy and access restrictions on top of public infrastructure—at the application or L2 solution level. He illustrates his position with an elegant analogy: Ethereum should become the equivalent of HTTP—a basic open protocol, while additional restricted-access layers are like HTTPS, which provides security and privacy without breaking the underlying architecture.
Examples of the latest wave of such "closed" solutions include Canton Network from Digital Asset, Circle's Arc project, and Stripe's Tempo. Raman calls these "consortium chains 2.0," recalling the sad fate of their predecessors—the interbank initiative R3 and the corporate ecosystem Hyperledger, which were actively promoted since 2016 but 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," stated the head of Etherealize.
Notably, back in June, Raman argued that traditional financial organizations had begun integrating Ethereum-based solutions into real business processes. This confirms my confidence that open networks with proven security and decentralization will prove more viable in the long term than closed consortia, which merely create an illusion of control.