A group of former Ethereum Foundation researchers has launched a for-profit startup called EthSystems, aiming to bring blockchain privacy to commercial banks. The company plans to build infrastructure on the Ethereum network for financial institutions, focusing on confidential stablecoin transfers, private bond issuances, and cross-chain settlements.
EthSystems says it has spent the past year developing privacy technologies for enterprise use cases while engaging with regulators, commercial banks, and asset managers. The spinout comes amid a wave of departures from the Ethereum Foundation, driven by disputes over leadership and strategy.
Growing Institutional Demand for Privacy
There is increasing institutional interest in using blockchains for financial infrastructure beyond cryptocurrency investing, EthSystems notes. While tokenized assets and stablecoins have gained traction, many banks remain reluctant to transact on transparent public ledgers, creating demand for confidentiality.
EthSystems argues that a lack of privacy is preventing commercial banks and asset managers from moving real-world assets onchain. The company says it will focus on systems that allow participants to selectively disclose transactions while maintaining Ethereum's security guarantees. Ethereum was trading at $1,935 as of July 15.