Latest: New Banks Must Upgrade Their Blockchain Infrastructure 2026
Banks risk falling behind if they cling to private blockchains. Upgrading to public, permissioned layer-2 infrastructure with ZK-proofs is essential for modern finance.
Opinion by: Igor Mandrigin, co-founder and chief technology and product officer of Gateway.fm
The environment has changed fundamentally since then, as tokenized assets, stablecoin settlements and institutional crypto exposure have quickly become the standard. The closed, permissioned models that once spoke to the risk-averse tendencies of banks now hold them back. At this critical geopolitical and macroeconomic juncture, financial institutions need to move beyond legacy frameworks and adopt public, permissioned layer 2 infrastructure built with zero-knowledge (ZK) proofs.
Some readers, especially those in regulatory or enterprise IT roles, might bristle at this contention, possibly arguing that public chains are too volatile, too transparent or too “ungovernable” to meet enterprise standards. Others may argue that traditional distributed ledger technology (DLT) is already effective and that migrating would create unnecessary operational and compliance risks. This dated view underestimates how rapidly global finance is moving onchain and how expensive it will be for institutions to remain isolated in closed systems.
The danger isn’t that private blockchains will fail technically. The danger is that they’ll fail strategically. Ultimately, legacy DLT stacks were never built for cross-chain communication, global liquidity, or real-time asset settlement. They operate as digital islands, disconnected from the growing onchain ecosystem where tokenized assets, collateralized lending and instant settlement are converging.Related: JPMorgan sees advantages in deposit tokens over stablecoins for commercial bank blockchains
That isolation comes at a cost. Liquidity is increasingly aggregating on public infrastructure, where decentralized finance (DeFi) protocols, tokenized treasuries and institutional stablecoin markets interact seamlessly. A private network, no matter how compliant, can’t tap into that liquidity. It can only watch it move elsewhere.
The longer banks wait to connect to open, interoperable infrastructure, the harder it becomes to catch up. Institutions that build on closed systems risk becoming like legacy clearinghouses in an era of automated settlement.
This can help with selective disclosure, where banks can demonstrate regulatory compliance, like Anti-Money Laundering (AML) an
Source: CoinTelegraph
