Startup Bets Privacy Will Bring Big Banks onto Ethereum

New company EthSystems says banks need privacy tools—not faster tech—to move real money onto public blockchains like Ethereum.

A new company called EthSystems thinks it knows what's stopping big banks from using public blockchains: a lack of privacy.

EthSystems recently split off from the Ethereum Foundation (the non-profit group that helps develop Ethereum, one of the world's biggest blockchains). A blockchain is a shared digital record system where transactions are recorded publicly and can't easily be changed.

Here's the problem: on a public blockchain, anyone can see the transactions. Banks and financial firms can't work that way—they must keep client data confidential and follow strict rules.

What EthSystems is building:

Tools that let banks keep transaction details private while still using public Ethereum
Custom infrastructure and advice for banks, asset managers, and even governments
Support for tokenized assets (real-world things like stocks or property represented digitally on a blockchain) and stablecoins (cryptocurrencies designed to hold a steady value, usually tied to the US dollar)

Founder Mo Jalil says the big obstacle isn't speed or scalability (a system's ability to handle lots of activity). It's confidentiality. "Almost every single financial institution requires some level of confidentiality," he said—meaning control over who sees what, not total secrecy.

Why this matters now: Jalil says banks have moved past just testing the technology. The experiment phase is over. Real trading desks and asset managers now want to move actual money onto blockchains—but only if their data stays protected and regulators are satisfied.

EthSystems won't build its own blockchain. Instead, it will work alongside existing privacy projects (like Aztec, Miden, and the bank-backed Canton Network) rather than compete with them.

The company also chose to become for-profit. While inside the Ethereum Foundation, banks kept asking to pay the team to turn ideas into real products—something a non-profit couldn't do.

The takeaway: If EthSystems is right, the key to bringing trillions of dollars of traditional finance onto public blockchains isn't making them faster—it's making them private enough for banks to trust.

This is an AI-generated summary. Read the original article at: https://www.coindesk.com/tech/2026/07/28/ethereum-startup-ethsystems-bets-privacy-is-key-to-getting-banks-on-public-blockchains