Wall Street's Enthusiasm for Private, Permissioned Blockchains Heats Up Again! Etherealize: Consortium Chain 2.0 is Destined to Fail

CoinCircle (120btc.coM): Vivek Raman, CEO of blockchain infrastructure service provider Etherealize, pointed out in an exclusive interview with CoinDesk that the current wave of Consortium Chain 2.0 in the market may essentially evolve into an inefficient competition among closed networks.

The so-called permissioned consortium chains mainly include restricted access networks such as the Canton Network led by Digital Asset, the stablecoin settlement network ARC launched by Circle, and the vertically integrated Tempo blockchain built by Stripe.

These systems tout "native privacy protection" and "reduced counterparty risk" as selling points, aligning with the risk control demands of traditional financial institutions. However, the closed and fragmented island-like architecture directly undermines the liquidity and interoperability foundation that distributed ledger technology relies on, making it difficult to form a large-scale market effect.

Learning from the 2016 R3 Collapse

From the perspective of the evolution of financial technology, the current institutional consortium craze is not the first of its kind. The R3 consortium in 2016 attracted a large number of multinational banks to form a consortium chain system, followed by many companies entering the Hyperledger ecosystem under the Linux Foundation. However, due to the difficulty in coordinating interests and the lack of external liquidity in the network, core members such as Goldman Sachs, Morgan Stanley, and Santander successively withdrew within a year, rendering the consortium virtually non-existent.

To avoid repeating the mistakes of history, Raman proposed a technical architecture concept that decouples the underlying layer from applications:

1. Open public chains serve as a universal foundation: The Ethereum mainnet is equivalent to the HTTP underlying protocol of the internet, acting as a globally open public settlement layer that aggregates the largest liquidity and composability in the network;

2. Privacy and compliance are encapsulated at the top layer: Similar to building an encrypted HTTPS protocol on top of HTTP, the permissions, identity verification (KYC), and data privacy required by financial institutions can be fully realized through Layer 2 networks or application layer modules.

This is precisely the core of Etherealize's business. The organization received seed funding from Ethereum co-founder Vitalik Buterin and the Ethereum Foundation in January 2025 and completed a $40 million Series A funding in the same year, aiming to seamlessly integrate traditional financial institutions and real-world assets (RWA) worth billions of dollars into the open Ethereum ecosystem.

Open Public Chains Lead the Asset Tokenization Wave

In the evolution path of institutional-level blockchains, there are still different perspectives in the industry. Christian Catalini, founder of the MIT Cryptoeconomics Lab, analyzed from the perspective of enterprise-level sales that controlled networks with clear rules and a single dominant party are more targeted in business expansion; however, if all assets are eventually deposited in isolated networks controlled by a single issuer, the original intention of blockchain to promote free competition in the industry will be significantly weakened.

The key catalyst for encouraging institutional funds to embrace public networks lies in the clarification of regulatory rules. BlackRock has successfully issued the tokenized fund BUIDL on the Ethereum mainnet, and its new generation of fund product design is also actively adapting to the compliance framework of the U.S. stablecoin regulation GENIUS Act.

As global regulatory boundaries gradually become clearer, institutional capital will ultimately flow to public networks that are permissionless and neutral. Compared to private consortium chains that require continuous membership costs and are subject to the early initiators, the frictionless interconnectivity of open public chains is more attractive for long-term asset allocation.

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