EthSystems says privacy is the key to getting banks on public blockchains

EthSystems, a startup spun out of the Ethereum Foundation earlier this month, is betting that privacy, not scalability, is the biggest obstacle preventing institutions from moving financial activity onto public blockchains.

The company, which emerged from the Ethereum Foundation’s Institutional Privacy Task Force, is building confidentiality infrastructure for banks, asset managers and governments looking to use Ethereum for tokenized assets, stablecoins and other financial applications.

Rather than creating an entirely new blockchain, EthSystems helps institutions deploy privacy technologies that allow sensitive transaction data to remain confidential while still settling on Ethereum.

“Almost every single financial institution requires some level of confidentiality,” co-founder Mo Jalil told CoinDesk in an interview. “Confidentiality doesn’t necessarily mean something has to be anonymous or hidden. There just needs to be controls over who sees what, when and how.”

EthSystems is far from the only company focused on institutional privacy. Projects such as 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 enterprises.