EthSystems Spins Out of Ethereum Foundation to Build Privacy Infrastructure
In brief
- EthSystems spun out of Ethereum Foundation's Institutional Privacy Task Force as a for-profit startup
- Privacy infrastructure enables banks, asset managers and governments to use Ethereum for tokenized assets and stablecoins
- Co-founder Mo Jalil: privacy, not scalability, is the main barrier to institutional blockchain adoption
The privacy problem
EthSystems helps institutions deploy privacy technologies that allow sensitive transaction data to remain confidential while still settling on Ethereum. Co-founder Mo Jalil emphasized that the need runs deep across the financial sector. Almost every single financial institution requires some level of confidentiality, he said — not necessarily anonymity, but controls over who sees what, when and how.
The shift from theory to practice is real. Early conversations with institutions were largely with innovation teams experimenting with blockchain technology. But discussions increasingly involve the business units responsible for running trading desks and managing assets. Institutions' experimentation phase with blockchain is over. Now it's actual people who want to get assets onchain and move real financial flows onchain.
A crowded but complementary space
EthSystems isn't alone in this mission. Ethereum-native privacy protocols like Aztec and Miden are also developing infrastructure aimed at enabling confidential transactions for enterprises. Canton Network, which is backed by major financial institutions including Goldman Sachs, BNP Paribas and DTCC, operates in similar territory.
But EthSystems intends to work alongside existing privacy projects rather than compete with them. The company plans to advise institutions on privacy architecture, build custom infrastructure where needed, and publish open-source research on institutional blockchain adoption.
From inside the Foundation to for-profit
The decision to become a for-profit company was driven by demand the team encountered while still inside the Ethereum Foundation. Operating as a commercial business makes it easier both to fund the company's work and to engage with procurement processes at large financial institutions.
Institutions no longer need convincing that blockchain has potential. Rather, they need infrastructure that satisfies regulatory and confidentiality requirements. Jalil put it plainly: the only way to bridge the gap between public blockchains and institutional control is with cryptography and privacy. EthSystems is positioning itself as the team that understands both sides of that equation — having worked inside the Foundation while now operating in the commercial space.
