Etherealize CEO Calls Wall Street Private Blockchain Push a Race to the Bottom

Wall Street's embrace of private blockchains is a strategic error that locks financial institutions into systems that replicate the same inefficiencies they were meant to eliminate, according to the CEO of Ethereum-focused firm Etherealize.

Raman, who leads Etherealize, made the comments publicly on Saturday, framing major banks' preference for permissioned ledgers as fundamentally misguided.

"Private blockchain adoption risks perpetuating inefficiencies, while public chains like Ethereum offer scalable, transparent solutions for finance."

Raman, CEO of Etherealize

The argument is familiar in crypto circles, but it carries more weight now that institutional blockchain deployments have moved from pilots to production. JPMorgan's Onyx network processes billions in intraday repo transactions. The Depository Trust and Clearing Corporation runs blockchain experiments. These are no longer theoretical; they are live infrastructure. Raman contends that building on private rails at this stage is not caution but a wrong turn.

The core technical critique is straightforward. Private blockchains, whether built on Hyperledger Fabric, R3's Corda, or JPMorgan's Quorum fork of Ethereum, sacrifice the open settlement layer that gives public chains their composability. Two banks running separate permissioned networks still need a trusted intermediary to reconcile positions between them. That intermediary is precisely what distributed ledger technology was supposed to remove. Public chains like Ethereum provide a shared neutral settlement layer where counterparties do not need to trust each other's infrastructure.

The counter-arguments are substantial. Privacy remains a genuine constraint. A public blockchain exposes transaction details to every node operator, which is incompatible with most institutional trading desks' legal obligations around information barriers and client confidentiality. Regulatory scrutiny of public networks also remains unresolved in several jurisdictions. Ethereum's Layer 2 scaling solutions, including rollups that batch transactions off-chain before settling to mainnet, are maturing rapidly, but maturation is not the same as proven performance at the scale of global capital markets. Private networks have years of enterprise deployment behind them. Dismissing that track record as a race to the bottom requires a strong assumption that public chain privacy tooling will close the gap before institutions have committed too deeply to their current infrastructure.

That assumption may be reasonable. Zero-knowledge proof technology, which allows one party to prove a statement is true without revealing the underlying data, has advanced significantly since the early private blockchain deployments of 2015 to 2020. Projects building ZK-based privacy layers on Ethereum now offer cryptographic confidentiality without abandoning the public settlement layer. If that tooling reaches production-grade reliability, the privacy objection to public chains weakens considerably.

The debate also has a timing dimension. The wave of Wall Street blockchain activity in 2016 and 2017, when nearly every major bank announced a distributed ledger initiative, produced infrastructure now deeply embedded in operational workflows. Replacing it with public chain architecture is not simply a technical decision; it is a multi-year migration with compliance, legal, and counterparty coordination costs. Raman's warning may be correct in the long run and still arrive too late for institutions that have already built on private rails.

What has shifted since the first generation of enterprise blockchain projects is the regulatory environment around public networks. The approval of spot Ethereum exchange-traded funds in the United States, combined with clearer custody frameworks in the European Union under MiCA (the Markets in Crypto-Assets regulation), has reduced one category of institutional risk that previously pushed firms toward private alternatives. Public Ethereum is no longer a compliance dead end for every use case.

Whether that shift is enough to redirect Wall Street's infrastructure spending remains uncertain. Raman's framing as a race to the bottom implies that private blockchain adoption is not just suboptimal but self-defeating, each institution building a walled garden that reduces the network effects available to all. The historical parallel is the pre-internet era of proprietary corporate networks: technically functional, but ultimately superseded by an open standard that no single institution controlled. Whether Ethereum becomes that standard for finance, or whether it remains one option among several, will depend on execution still underway.