Wall Street's private blockchain obsession is a 'race to the bottom,' Ethereum advocate Raman warns

Ethereum advocate Vivek Raman warns that a resurgence in private, gated blockchains threatens the potential benefits of the technology. These "consortium chains," such as Digital Asset’s Canton Network, Circle’s stablecoin payments play ARC, and Stripe’s Tempo blockchain, prioritize privacy and reduced counterparty risk, which mainstream finance finds attractive.

However, these systems have been around for years, with early adopters including banks like Goldman Sachs, Morgan Stanley, and Santander. Raman likens Ethereum's mainnet to HTTP, the base layer of the internet, and argues that an open, permissionless infrastructure is crucial for maximum interoperability and liquidity. He emphasizes that a global, open, permissionless base layer is necessary for Ethereum, with customizability built on top.

Raman believes the market is moving away from decentralized systems, as evidenced by the rapid adoption of gated systems with clear sponsors. He notes that enterprise sales are driving this trend, with companies like Etherealize helping traditional finance firms access Ethereum-based funds that comply with regulatory frameworks like the GENIUS Act.

Raman predicts that if the market settles on curated networks with clear sponsors, some of the competitive benefits of blockchains may never materialize.