Wall Street's closed blockchains are a "race to the bottom": Etherealize CEO on the liquidity crisis
In recent months, Wall Street has been demonstrating a dangerous trend: instead of integrating into the open crypto ecosystem, major financial institutions are increasingly turning to closed blockchains with restricted access. Vivek Raman, co-founder and CEO of Etherealize, calls this nothing less than a "race to the bottom," and his argument is hard to dispute.
Fragmentation Instead of Consolidation
Consortium networks, which are now being actively promoted in the market, create isolated circuits that are unable to interact with each other. This directly undermines two fundamental advantages of distributed ledger technology: system interoperability and liquidity concentration. Instead of a single global pool of capital, we get scattered "lakes" that merely imitate decentralization.
It is telling that Raman compares Ethereum to HTTP—an open protocol that became the foundation of the internet. By his logic, privacy and access restrictions should be implemented not at the base layer level, but on top of it—through applications or L2 solutions, similar to how HTTPS adds encryption to standard HTTP. This is an architecturally sound approach that preserves interoperability without sacrificing security.
Ghosts of the Past
The current wave of "closed" projects—Canton Network from Digital Asset, Arc from Circle, and Tempo from Stripe—is essentially "consortium chains 2.0." We already saw this scenario in 2016 with the R3 initiative and the Hyperledger ecosystem, which never achieved mass adoption. History is repeating itself, and this is a troubling signal for the industry.
"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. And this is not just rhetoric: back in June, he noted that traditional financial organizations had begun integrating Ethereum-based solutions into real business processes, moving from experiments to practical use.
My conclusion: closed blockchains are a dead-end branch of evolution that will only delay the inevitable integration of traditional finance with open protocols. The market will ultimately choose the infrastructure that provides maximum liquidity and interoperability, and this is only possible on public blockchains. Institutions should learn this lesson before they lose their competitive edge.