Wall Street's closed blockchains are a "race to the bottom": Etherealize CEO on the dead end of consortium networks
In recent months, we have been observing a worrying trend: the largest financial institutions are once again turning to closed blockchain networks with restricted access. However, as the leadership of Etherealize rightly points out, this path leads to a dead end. Such consortium initiatives not only fragment liquidity but also effectively deny the very philosophy of decentralized technologies, returning us to the isolated systems that blockchain was supposed to move away from.
The problem with closed loops is obvious: they are unable to interact with each other, destroying two key advantages of the technology — interoperability and a shared liquidity pool. Instead of creating a unified economic space, we get fragmented "digital fortresses" that merely imitate innovation but create no real value for the market.
Architecture of the future: an open base layer
The key argument, which I fully share, is that privacy and access control should be implemented at the upper layers of the infrastructure, not at the base layer. The comparison with internet protocols here is absolutely apt: Ethereum acts as HTTP — a universal and open standard — while application-level or L2 solutions (like HTTPS) provide the necessary confidentiality and selective access. This allows global interoperability to be preserved without sacrificing the security requirements of institutional clients.
New projects such as Canton Network from Digital Asset, Arc from Circle, and Tempo from Stripe are positioned as "consortium chains 2.0." However, history has already taught us through mistakes. The R3 and Hyperledger initiatives, actively promoted since 2016, failed to achieve mass adoption precisely because of their closed architecture. We risk stepping on the same rake, but this time with more complex technologies.
Etherealize's position is crystal clear: global, permissionless infrastructure is the only viable option for the base layer. Only an open network can provide the necessary network effect and liquidity that traditional finance so badly needs. Interestingly, in June there were already signals of TradFi moving from experiments to real use of Ethereum in business processes. This confirms that the market is gradually realizing that the future lies in hybrid models based on public blockchains.
My analysis: Wall Street, by trying to control the technology through closed sandboxes, is only delaying the inevitable. Institutional players will ultimately be forced to integrate with open networks, since only they provide unlimited liquidity and cross-network interoperability. The question is only how much capital will be lost on intermediate "dead-end" solutions.