Financial Institution-Specific Blockchain: A New Threat to Ethereum’s Dominance!

Jakarta, Pintu News – Financial institutions are starting to abandon Ethereum and turn to blockchains specifically designed to meet their institutional needs. This decision is triggered by privacy concerns and the need for solutions that are more tailored to corporate operations.

Special Blockchain Introduction by Klarna and Stripe

On November 25, Klarna announced the launch of KlarnaUSD, becoming the first bank to issue a stablecoin on the Tempo network, a payments blockchain developed by Stripe and Paradigm. The move marks an important shift away from using Ethereum, which has dominated the stablecoin market with Tether and USDC having a market capitalization of over $100 billion.

Klarna’s decision to use Tempo demonstrates the potential for liquidity reduction and innovation that can occur in the Ethereum ecosystem. Klarna chose Tempo because it offered a solution that better suited their operational and transaction security needs.

This shows a trend where large companies prefer to develop or use blockchains that can be customized specifically for their business needs rather than relying on generic solutions like Ethereum.

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Canton Network Advantages in Privacy and Efficiency

Canton Network is emerging as another example of a blockchain specifically designed with a focus on privacy. The network allows institutions to set the level of visibility of their transactions, from a completely open to a completely private system. This is particularly attractive to financial institutions that need tight control over the information they share.

Goldman Sachs’ Digital Asset Platform (GS DAP) utilizes Canton Network natively, demonstrating the trust and adoption of large financial institutions. With high capital efficiency, Canton generates around $96 of Total Value Locked (TVL) RWA for every $1 of market capitalization, much higher compared to Ethereum which only generates around $0.03 TVL RWA per $1 of market capitalization.

Reasons Financial Institutions Are Leaving Ethereum

One of the main reasons financial institutions are moving away from Ethereum is privacy concerns. Public blockchains like Ethereum display all transactions permanently, which can be a big problem for banks or corporations making large fund transfers. This transparency allows competitors to analyze patterns, do front-running, and uncover strategic business relationships.

In addition, the transparency of public blockchains can leak sensitive data and reduce leverage in negotiations, which goes against regulations such as GDPR. This suggests that while public blockchains may be ideal for decentralized or retail use, financial institutions are likely to opt for private or specialized networks that offer more confidentiality.

The Future of Ethereum and Specialty Blockchains

This development marks a turning point in the adoption of blockchain by financial institutions. Although Ethereum still has an important role to play in the crypto ecosystem, the need for privacy and specialized solutions may lead to a greater preference towards custom-designed blockchains. Whether Ethereum can adapt and meet these needs or will be replaced by specialized networks, only time will tell.

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FAQ

Q1: What are stablecoins?

A1: A stablecoin is a type of cryptocurrency whose exchange rate is linked to another stable asset, such as the US dollar, to reduce volatility.

Q2: Why did Klarna choose to use the Tempo network instead of Ethereum?

A2: Klarna chose the Tempo network because it offered a solution that better suited their operational and transaction security needs, in contrast to Ethereum which is more general and less customizable.

Q3: What is Total Value Locked (TVL)?

A3: Total Value Locked (TVL) is a metric used to measure the total amount of assets stored in various decentralized finance protocols.

Q4: How is privacy an important factor in the selection of blockchain by financial institutions?

A4: Privacy is an important factor because large transactions conducted by financial institutions require confidentiality to avoid risks such as competitor analysis and front-running.

Q5: Will Ethereum be replaced by a dedicated blockchain?

A5: Although Ethereum is currently facing challenges from specialized blockchains, it remains unclear whether it will be completely replaced or can adapt to meet the needs of financial institutions.

Reference

• BeInCrypto. Institutions Shift from Ethereum to Private Blockchains. Accessed on November 27, 2025