Wall Street's closed blockchains are a "race to the bottom": Etherealize CEO explains why privacy should not be built on isolation
The financial mainstream has once again embraced the idea of closed blockchains, but this trend is leading the industry into a dead end. Vivek Raman, co-founder and CEO of Etherealize, sharply criticized consortium networks actively promoted by major banks and payment giants during a recent interview. In his assessment, such projects not only fragment the market but deliberately return us to isolated systems, against which blockchain was originally created.
Why "closed loops" are dangerous for liquidity
Raman emphasizes that closed networks do not interact with each other, destroying two fundamental advantages of the technology—compatibility and liquidity aggregation. Instead of a single global pool of assets, we get scattered "lakes," each requiring separate integration and reducing overall market efficiency. This is not evolution but degradation.
The key thesis of Etherealize is that privacy and access control should not be a property of the base layer. It is more logical to implement them at higher levels: in applications or through L2 solutions. Raman draws a direct analogy with the web: Ethereum is HTTP, an open protocol, while privacy tools like HTTPS are overlays that do not break the underlying architecture. Proliferating separate closed networks means creating "consortium chains 2.0."
Lessons from the past: R3 and Hyperledger did not work
As an argument, he recalls the fate of previous high-profile initiatives: the interbank project R3 and the corporate platform Hyperledger were actively promoted since 2016 but never became the standard. The current wave—Canton Network from Digital Asset, Arc from Circle, and Tempo from Stripe—risks repeating their path.
"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. According to him, it is the open network that gives institutions maximum flexibility and access to liquidity, not an isolated "garden" with a limited number of participants.
My comment: Raman's argumentation is strong, but closed networks also have a pragmatic rationale—regulatory clarity and data control. However, history shows that winners are not those who build walls but those who create bridges. If Wall Street continues to ignore open infrastructure, it risks being left on the sidelines of its own race.