The blockchain is slowly shifting away from public networks like Ethereum and is being taken over by the private and permissioned blockchain networks that meet business needs. A recent report highlights the discomfort of major institutions and investment banks regarding the public ledger’s transparency, indicating a larger shift in how business’s view using blockchain technology in a regulated and risk-averse environment.
For most traditional players in banking, asset management, and enterprise finance, the openness of public chains, while a paradigm of decentralization, now poses a snag: every transaction is permanently visible on a publicly accessible ledger. That transparency, once hailed as a blockchain virtue, has become a liability when firms must protect customer data, comply with confidentiality requirements, or meet regulatory standards. Private blockchains have addressed these concerns because they limit who has access to them and who controls them and protect institutions and individuals from outside interference/scrutiny when conducting sensitive financial or institutional transactions.
In addition to privacy-related issues, institutions are concerned about how a private infrastructure is more efficient than a public infrastructure. Since a private blockchain does not require a consensus mechanism between anonymous nodes on a global network, it can provide faster transaction finalities, significantly lower costs, and ease of integration into existing enterprise infrastructures.
That said, this institutional retreat from Ethereum does not necessarily signal a wholesale rejection of blockchain technology or its public roots. Rather, it reflects a maturing of the sector: firms are choosing a type of blockchain that aligns with their risk tolerance, operational needs, and regulatory environment. Many industry analysts believe that for certain use cases—particularly those involving real-world asset tokenization, inter-institution settlement, and enterprise data workflows—private blockchains will become the norm, while public blockchains remain dominant for open finance, decentralized applications, and crypto-native markets.
Institutions moving to private blockchains can also take advantage of hybrid models: private, permissioned networks internally, with selected anchoring or interoperability layers on public chains to ensure verifiability and optional external auditability. Research in privacy-preserving smart contract frameworks and permissioned-to-public “pinning” mechanisms is indicative that hybrid architectures are likely to grow in popularity in scenarios where regulatory compliance and audit trails matter.
This is an important institutional pivot for the broader blockchain ecosystem. It challenges the conventional wisdom that public blockchains are inevitably the future of enterprise finance. Instead, the likely scenario could be a dual-track system: public chains continuing to drive open, decentralized finance and public applications, while private chains underpin the back-end of regulated, compliance-heavy industries.
In contrast to the past, institutions are transitioning away from Ethereum and are finding alternatives to do so by taking advantage of blockchain technology. This does not indicate that the public interest in blockchain has diminished; instead, it indicates that the technology is continually evolving and becoming more and more tailored to meet the operational needs of the real world. Therefore, instead of approaching the use of blockchain technology as either “public” or “private,” the focus shifts to which type of blockchain is most suitable for the intended purpose.
Building a Common Digital Finance Identity Across Borders
At the Commonwealth Union, we believe that the true potential of finance and technology lies in connecting and collaborating across borders. We are therefore developing strategic alignment between governments, financial institutions, and technology innovators via our Blockchain Network. The purpose of this initiative is to facilitate greater international coordination, new cross-border potential, and focused investment flows into the places where they can make the most impact.
True to this vision, we are poised to soon launch our Digital Banking Network, which will render financial services across the Commonwealth and MENA more inclusive and accessible. If you would like more information or our mission resonates with you, we would love to connect. Please feel free to reach out to us at Info@commonwealthdigitalbankingclub.com
