Wall Street’s Private-Chain Boom Risks Undermining Blockchain’s Core Values

Wall Street’s growing embrace of private blockchains could undermine the core values of blockchain technology, CoinDesk reported on August 15.

In an interview, Etheralize CEO Vivek Raman said the spread of enterprise consortium chains could eventually create a vicious cycle of competition among those networks.

A consortium chain is a private blockchain that limits participation to selected companies or institutions. On Wall Street, those projects have gained attention for offering greater privacy in financial transactions and easier management. Examples include Digital Asset’s Canton Network, Circle’s ARC blockchain for stablecoin payments and Stripe’s Tempo.

Raman argued that such closed networks could restrict the high liquidity and interoperability blockchain technology was meant to achieve. Instead, he said, the better approach is to add the necessary permissioning and privacy features on top of open infrastructure.

He added that a global, open and permissionless infrastructure is needed as the base layer, with institutions building permission settings tailored to their needs at the application layer or on Layer 2.