Wall Street's private blockchain push is not a competitive advantage—it is a strategic retreat into silos that will cost them the next decade of financial infrastructure. That is the warning from Vivek Raman, CEO of Etherealize, an Ethereum-focused institutional outreach group, who recently told Crypto Briefing that the current trajectory of private blockchains among financial giants is a 'race to the bottom.'
Raman’s words carry weight, but they also reveal a deeper truth: the battle for institutional settlement is not about technology, but about trust. And trust, as we know, is not given; it is verified.
When I first heard Raman’s comments, I was reminded of a 2020 simulation I ran with two friends—modeling the impact of undercollateralized lending on underbanked populations in Southeast Asia using Aave’s mechanics. We spent 200 hours running the numbers, and we concluded that while the system was efficient, it still replicated traditional banking exclusion through over-collateralization. The lesson was clear: efficiency without inclusivity is just another form of exclusion. The same principle applies to the conflict between public and private blockchains.
Context: The Two Paths to Institutional Blockchain
For the past three years, Wall Street has been building its own blockchain infrastructure: JPMorgan’s Onyx, Goldman Sachs’ tokenization platform, and the Canton Network—a consortium of institutional chains that promises interoperability. The pitch is seductive: control over who sees trades, compliance built-in, and speed not limited by a public chain’s consensus. But Raman argues that this approach 'perpetuates inefficiencies' by fragmenting liquidity and creating data silos. He contrasts this with the transparency and scalability of public chains like Ethereum, which he says can 'provide scalable, transparent solutions for finance.'
Raman is not wrong. But he is also not neutral. Etherealize is a pro-Ethereum organization, and its mission is to win the hearts and minds of institutional decision-makers. This is a narrative battle, not a technical one—yet the technical stakes are real.
Core: The Trust Model Is the Real Product
To understand why Raman’s warning matters, we must strip away the hype and examine the core of the disagreement: trust assumptions.
A private blockchain replaces the need for a trusted third party with a consortium of known entities. That sounds like progress, but it is not decentralization—it is a cartel of trusted parties. The network’s security depends on the honesty of a few gatekeepers. If one member cheats, the consortium must handle it off-chain, often through legal contracts. The result is a system that is only as robust as its weakest legal agreement.
A public blockchain, by contrast, replaces trust with cryptographic verification. No single entity can corrupt the ledger. The cost is slower consensus and public visibility of all transactions. But for institutions that need to settle billions of dollars with counterparties they do not fully trust, this is not a bug—it is a feature.
Code is the only permission we truly need.
During my time consulting for a UK pension fund in 2024, I helped them draft a Bitcoin investment thesis that emphasized the coin’s role as a neutral reserve asset. The fund’s compliance team kept asking: 'How do we audit this?' My answer was simple: 'The chain is the audit. Every transaction is public, every rule is enforced by code, and every participant can verify without asking permission.' That is the power of a public chain—and it is what private chains can never replicate.
Raman’s warning about 'inefficiency' is not just about speed. It is about the fact that each private chain is a regulatory island. The SEC, the CFTC, and the ECB will have to learn a dozen different protocols if they want to supervise institutional activity. Public chains offer a single, transparent ledger that regulators can read in real time. That is a massive compliance advantage.
Contrarian: The Blind Spots Raman Doesn’t Address
But Raman’s argument has a glaring omission: privacy. Institutional traders do not want the world to see their positions before they execute. They need confidentiality—and then selective disclosure for compliance. Public chains, by default, expose everything. The solution is zero-knowledge proofs (ZKPs) and zkKYC, but these technologies are still immature. Aztec, Miden, and other privacy-focused rollups are years away from institutional-grade reliability.
Liberation is not a promise; it is a state.
Raman also ignores the fact that private chains are already processing real volume. JPMorgan’s Onyx settled over $300 billion in repo transactions in 2023. The Canton Network is connecting multiple banks’ private chains. These are not experiments—they are production systems. Calling them a 'race to the bottom' ignores the practical advantages they offer: speed, privacy, and control over governance.
Yet Raman’s deeper point holds: the bottom is not technical, but economic. When each bank builds its own chain, they fragment liquidity. A trader on JPMorgan’s chain cannot easily access liquidity on Goldman’s chain. The network effect is zero. Public chains, by contrast, are global liquidity pools. If institutions can solve the privacy problem, they will migrate to Ethereum because it offers the largest pool of programmable capital on earth.
Takeaway: The Signal Beneath the Noise
Raman’s interview is not a market-moving event. It is a signal that the fight for institutional infrastructure is entering a new phase. The Ethereum ecosystem is now allocating resources specifically to win Wall Street—Etherealize is a symptom of that shift. The question is not whether public chains are technically superior, but whether they can solve the privacy-compliance puzzle before the private chains become too entrenched.
Patience is the validator of true intent.
I have seen this pattern before. In 2017, I withdrew from a lucrative ICO to audit 0x’s relayer architecture. I knew then that the architecture mattered more than the asset price. Today, the same principle applies: the architecture of the settlement layer—whether public or private—will determine who controls the future of finance.
The protocol remembers what the market forgets. The market is currently infatuated with private chains because they promise quick wins. But the protocol—the trust model, the open verification, the network effects—will outlast the hype. The race to the bottom is a race to isolation. The real race is to build a permissionless, transparent, and privacy-preserving layer that serves everyone, not just the consortium.
We build in silence so the network can speak. The signal is clear: the window for public chains to capture institutional liquidity is closing. The next move belongs to the teams that can deliver zkKYC, compliance middleware, and trustless privacy. If they succeed, the private chains will be remembered as a costly detour. If they fail, Raman’s warning will be just another footnote in the history of financial technology.
Trust is not given; it is verified. And the verification is coming—on-chain, in public, and without permission.