Institutions Turn to Purpose-Built Blockchains as Privacy Concerns Drive Shift Away from Ethereum

Financial institutions are showing a trend of moving away from the Ethereum network toward specialized, purpose-built blockchains, driven primarily by significant privacy and confidentiality requirements. Recent examples, such as Klarna launching its stablecoin on Tempo instead of an Ethereum L2, have analysts suggesting this erodes Ethereum's thesis for stablecoin dominance. Furthermore, networks like the Canton Network, which offers core privacy controls and is used by entities like Goldman Sachs' Digital Asset Platform, are gaining traction. The core issue with public chains like Ethereum is that their inherent transparency exposes all transactions, creating risks for institutions regarding competitor analysis, trade front-running, and regulatory compliance. This has led enterprises to favor specialized chains that offer necessary confidentiality, suggesting a future split where public chains serve retail use while private or permissioned networks handle institutional finance.

(Source：BeInCrypto)