Corporate Blockchains Gain Popularity but Face Long-term Competition from Public Networks

Corporate blockchains for payments are gaining popularity, driven by companies like JP Morgan, Circle, and Stripe. These non-neutral networks are expected to surge over the next couple of years, but experts predict they will fail long-term due to their lack of core blockchain values like disintermediation and independence. Public networks like Bitcoin and Ethereum are expected to outcompete them.

Corporate blockchains for payments are gaining traction, with major players such as JP Morgan, Circle, and Stripe leading the charge. These private, permissioned networks aim to leverage existing customer bases and overcome the limitations of public blockchains. However, experts predict that these corporate-led initiatives may struggle in the long term due to their lack of core blockchain values like disintermediation and independence.

The surge in corporate blockchains is driven by the growing institutional adoption of cryptocurrencies. Established crypto players and traditional heavyweights are launching their own Layer-1 or Layer-2 blockchain infrastructures to meet the demands of their users. These networks often hide the technical complexities of blockchain from users, making it easier to onboard customers Corporate Blockchains for Payments Are Gaining Popularity– But Will They Last?^[1].

However, the fundamental flaws in corporate blockchain design are significant. Unlike public blockchains, which are designed to be neutral and decentralized, corporate blockchains are centralized and controlled by a single entity. This lack of trust and transparency can alienate users, issuers, and developers who prefer the neutrality of public networks Corporate Blockchains for Payments Are Gaining Popularity– But Will They Last?^[1].

Moreover, the limitations of public blockchain infrastructure, such as slow speeds and security concerns, have led many corporations to build their own networks. For instance, Google Cloud is piloting the GCUL, a private, permissioned layer-1 ledger for institutional finance, while Stripe is developing Tempo, an EVM-compatible Layer-1 designed to reduce the cost and time of global stablecoin payments Corporate Blockchains for Payments Are Gaining Popularity– But Will They Last?^[1].

Despite the proliferation of these corporate blockchains, experts like Omid Malekan argue that they do not have potential for long-term success. The core value of blockchain is to empower communities by taking control away from centralized authorities. Corporate blockchains, which are designed to make existing activities more efficient, overlook this essential purpose Corporate Blockchains for Payments Are Gaining Popularity– But Will They Last?^[1].

In contrast, public blockchains like Bitcoin and Ethereum are built to last. They function as immutable protocols that cannot be modified or interfered with, ensuring a system built on disintermediation by design. As these networks continue to grow in popularity, they pose a significant threat to traditional finance and central banks Corporate Blockchains for Payments Are Gaining Popularity– But Will They Last?^[1].

While corporate blockchains represent a necessary and transitional step toward adopting disruptive technology, they do not secure long-term viability by themselves. Without a commitment to credibility and neutrality, these networks will inevitably be drowned out by existing, immutable protocols that guarantee a system built on disintermediation by design Corporate Blockchains for Payments Are Gaining Popularity– But Will They Last?^[1].