Wall Street's closed blockchains are a "race to the bottom": Etherealize's CEO explains why institutions are repeating the mistakes of the past
In recent months, we have observed a troubling trend: the largest financial institutions are increasingly experimenting with closed blockchain networks restricted to a narrow circle of participants. However, as Etherealize co-founder and CEO Vivek Raman rightly notes, this path is leading the industry into a dead end. He describes what is happening as nothing less than a "race to the bottom."
Fragmentation Instead of Integration
The essence of Raman's criticism is crystal clear: consortium networks created at the behest of Wall Street are not just isolated from each other—they are destroying two fundamental advantages of distributed ledger technology. This refers to system interoperability and liquidity concentration. Instead of a single global pool of assets, we get scattered "pockets" that do not interact with each other. This is a step backward, toward the very isolated systems that blockchain was supposed to eliminate from the world of finance.
Open Base vs. Closed Overlays
Etherealize consistently promotes Ethereum as an open base layer for institutional players. Raman insists: privacy and access control are functions of the overlay, not the foundation. It is more logical to implement them at the application or L2 solution level rather than proliferating separate closed networks. He illustrates his position with an elegant analogy: Ethereum is HTTP, a global open protocol, while restricted-access layers are HTTPS, which provides security on top of open infrastructure.
"Consortium Chains 2.0"
Examples of the new wave of such solutions include Canton Network from Digital Asset, the Arc project from Circle, and Tempo from Stripe. Raman has dubbed them "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 gained widespread adoption. History is repeating itself, and this should be a signal to the market.
"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. Notably, back in June he argued that traditional financial organizations had begun integrating Ethereum-based solutions into real business processes, moving from experiments to practical use.
My comment: Raman's position is not just a defense of Ethereum's interests but a rational view of network economics. Closed consortia are doomed to limited liquidity and high operational costs for integration. The market has already gone down this path with R3 and Hyperledger, and the result was predictable. Institutional players should learn this lesson, otherwise they risk building costly "digital bunkers" that will remain unclaimed.