Ethereum startup EthSystems bets privacy is key to getting banks on public blockchains

Ethereum Foundation spinout EthSystems is developing privacy infrastructure tailored for banks and financial institutions aiming to operate on public Ethereum blockchains. The company’s founder, Mo Jalil, emphasized that confidentiality concerns, rather than scalability issues, represent the primary barrier for institutions moving real-world finance onto public blockchains. EthSystems focuses on providing privacy-preserving tools that enable regulated entities to conduct transactions without exposing sensitive data, addressing the confidentiality requirements necessary for compliance.

EthSystems emerged from the Ethereum Foundation’s Institutional Privacy Task Force earlier in July 2026 and builds on the growing institutional demand to transition from experimental blockchain pilots to production deployments. Instead of creating a separate blockchain, EthSystems helps institutions incorporate privacy technologies that keep transaction details confidential but still settle on Ethereum’s public network. Jalil clarified that confidentiality does not equate to full anonymity but involves controlling who can access specific information and when.

Unlike other privacy projects such as Canton Network, Aztec, and Miden, which also target confidential enterprise transactions, EthSystems distinguishes itself by advising on privacy architecture, delivering customized infrastructure when necessary, and contributing open-source research. The startup aims to collaborate with existing privacy technologies rather than compete with them, tailoring solutions to the specific privacy needs of institutional clients.

The move to become a for-profit company was motivated by institutional clients seeking professional services to advance blockchain projects from concept to production. Operating commercially allows EthSystems to fund its work sustainably and engage more effectively with the procurement processes of large financial entities. Jalil noted that client discussions have shifted from innovation experimentation to practical asset management and trading operations on-chain, reinforcing the company's thesis that cryptography and privacy are essential for bridging institutional requirements with public blockchain adoption.