Wall Street's closed blockchains are a "race to the bottom": opinion of the head of Etherealize
In recent months, Wall Street has been demonstrating a dangerous trend: instead of using open infrastructure, major financial institutions are increasingly turning to closed blockchain networks with restricted access. I call this phenomenon nothing less than a "race to the bottom"—and I am far from alone in this assessment.
Fragmentation Instead of Integration
The consortium networks currently being actively promoted fragment liquidity and return us to the isolated systems that distributed ledger technology was supposed to move away from. Closed loops do not interact with each other, which undermines two key advantages of blockchain: system interoperability and liquidity concentration. Instead of a unified financial space, we get a set of disparate "digital reservations."
Privacy and access restrictions are more logically built on top of public infrastructure—at the application or L2 solution level—rather than spawning separate closed networks. The comparison here is simple: Ethereum acts as HTTP, while additional layers with restricted access and privacy act as HTTPS. No one thinks of replacing the basic internet protocol for the sake of data encryption.
Lessons of the Past Not Learned
The latest wave of "closed" solutions—Canton Network from Digital Asset, the Arc project from Circle, and Tempo from Stripe—is essentially "consortium chains 2.0." We already went through this in 2016 with the R3 interbank initiative and the Hyperledger corporate ecosystem. Both projects never gained serious traction, and now history is repeating itself with renewed force.
"We firmly believe and have always held this position that a global, open permissionless infrastructure is necessary as the base layer," I emphasize. And this is not just an ideological stance—it is a pragmatic view of how the financial system of the future should function.
It is telling that already in June, traditional financial organizations began implementing Ethereum-based solutions into real business processes. This confirms that open infrastructure can meet even the strictest institutional requirements, without the need to create parallel closed worlds.
My conclusion: closed blockchains are a dead-end branch of evolution that will only delay the inevitable transition of the financial industry to open standards. The question is not whether this transition will happen, but how many resources will be wasted along the way.