Institutions Turn to Purpose-Built Blockchains as Privacy Concerns Drive Shift Away from Ethereum

The Institutional Shift from Ethereum

Financial institutions are increasingly distancing themselves from Ethereum (ETH) and moving toward customized, purpose-built blockchains. This change stems from rising privacy demands, regulatory pressures, and the need for greater transaction confidentiality.

Privacy, Compliance, and Performance

Ethereum’s public and transparent ledger poses challenges for institutions that require discretion in financial data handling. Purpose-built networks offer selective transparency and compliance mechanisms, enabling participants to meet privacy standards without sacrificing on-chain efficiency.

Custom Blockchain Advantages

These specialized chains allow organizations to integrate industry-specific rules, smart contract permissions, and enhanced security layers. By focusing on their own regulatory and operational goals, institutions can achieve a balance between decentralization and controlled access.

Broader Trend in Institutional Blockchains

The migration from general-purpose public blockchains toward tailored enterprise systems reflects a growing trend: prioritizing privacy, compliance, and scalability over full openness. This transition could redefine how traditional finance interacts with blockchain technology in the coming years.

“As privacy concerns deepen, institutions are favoring blockchains that align with their internal policies and customer data standards,” noted an industry analyst.

Author Summary

Institutions are abandoning Ethereum for customized blockchains that better meet their privacy, compliance, and operational needs, marking a pivotal move in institutional blockchain adoption.

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Bitget Bitget — 2025-11-25

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