EthSystems, a startup mined by the Ethereum Foundation earlier this month, is betting that privacy, not scalability, is the biggest obstacle preventing institutions from moving financial activity to public blockchains.
The company, which emerged from the Ethereum Foundation’s Institutional Privacy Task Force, builds privacy infrastructure for banks, asset managers and governments that want to use Ethereum for tokenized assets, stablecoins and other financial applications.
Instead of creating an entirely new blockchain, EthSystems helps institutions implement privacy technologies that allow sensitive transaction data to remain confidential while still settling with Ethereum.
“Almost every single financial institution requires some level of confidentiality,” co-founder Mo Jalil told CoinDesk in an interview. “Confidentiality does not necessarily mean that something must be anonymous or hidden. There must just be control over who sees what, when and how.”
EthSystems is far from the only company focused on institutional privacy. Projects like the Canton Network, which is backed by major financial institutions including Goldman Sachs, BNP Paribas and DTCC, as well as Ethereum-native privacy protocols like Aztec and Miden, are also developing infrastructure aimed at enabling confidential transactions for businesses.
