For the past few years, the Ethereum Virtual Machine has been treated as the default operating system for finance onchain. Thousands of applications run on it. Billions of dollars flow through it. Yet when you look at where actual banks, funds, and regulated institutions operate, something becomes very clear. Almost none of them are using public EVM chains for real financial activity. This is not because they are slow to adopt technology. It is because the architecture of public EVM chains is fundamentally incompatible with how regulated finance works.
The biggest problem is not scalability. It is not even fees. It is visibility.
On a public EVM chain, everything is transparent. Every balance, every transaction, every interaction with a smart contract is visible to anyone with an internet connection. That is often celebrated as a feature, but for institutions it is a deal breaker. Financial markets do not operate in public view. Positions, counterparties, trade sizes, and exposures are protected information. If a hedge fund’s trading strategy, a bank’s liquidity position, or a corporate treasury’s movements were visible to competitors and adversaries in real time, it would create massive risk.
In traditional markets, privacy is enforced by law, technology, and institutions. Customer data is protected. Trading desks do not broadcast their positions. Regulators and auditors have access, but the public does not. Public EVM chains invert this model. They make everything public by default, and there is no way to selectively hide or reveal information. Once something is onchain, it is visible forever.
This single design choice alone disqualifies public EVM for most institutional use cases. But the problems go deeper.
Institutions also need compliance. They must know who they are transacting with. They must be able to enforce sanctions, limits, and reporting obligations. On public EVM chains, wallets are just addresses. There is no native concept of identity, accreditation, or jurisdiction. You can build layers on top, but the base layer does not enforce anything. This creates a compliance nightmare. A bank cannot risk sending assets to a sanctioned address or accepting funds from an unknown counterparty. On a public chain, it has no reliable way to prevent that.
Then there is the issue of data. Financial institutions are legally required to keep detailed records of trades, balances, and ownership. These records must be accurate, tamper resistant, and auditable. Public EVM chains are immutable, but they are not confidential. Institutions cannot store sensitive financial records on a ledger that anyone can read. Even if the transactions are correct, the exposure of that data can violate privacy laws and contractual obligations.
Public EVM chains also struggle with something that matters deeply to institutions: settlement finality and legal clarity. In traditional markets, settlement systems are tightly controlled. When a trade settles, ownership changes in a legally recognized way. On public chains, settlement is probabilistic and subject to forks, reorgs, and governance changes. This uncertainty is unacceptable for regulated financial products.
All of these issues come back to the same root cause. Public EVM chains were designed for open, permissionless experimentation, not for regulated financial markets. They assume that transparency is always good and that anyone should be able to participate in any transaction. That is a beautiful idea for grassroots innovation, but it does not match how trillions of dollars move in the real world.
This is where Dusk takes a fundamentally different approach.
Dusk was designed from the beginning as a blockchain for compliant, private finance. Instead of making everything public, it makes everything confidential by default. Balances and transaction amounts are encrypted. Only authorized parties can see them. Zero knowledge proofs and homomorphic encryption ensure that the network can still verify correctness without revealing the data.
This alone changes everything. A bank can hold tokenized assets on Dusk without exposing its positions. A fund can trade without broadcasting its strategy. A corporate treasury can move capital without signaling to the market. Privacy is not an add on. It is the foundation.
At the same time, Dusk does not sacrifice auditability. Through selective disclosure, institutions can reveal data to regulators, auditors, or counterparties when required. This mirrors how traditional finance works. Information is shared with the right people at the right time, not with the entire world.
Dusk also integrates identity and compliance into the protocol. Participants can be known, verified, and restricted according to rules. This allows financial institutions to meet their obligations while still using a decentralized infrastructure. Instead of trying to bolt compliance onto a permissionless chain, Dusk builds it into the core.
Settlement on Dusk is also designed with financial markets in mind. Transactions have strong finality and are legally meaningful. This is essential for assets like securities, bonds, and funds, where ownership and timing matter.
The result is a blockchain that looks less like a public bulletin board and more like a digital version of the financial plumbing that already exists. But unlike traditional systems, it is programmable, efficient, and global.
From the perspective of institutions, this is not a compromise. It is an upgrade. They get the benefits of onchain settlement, automation, and global reach without giving up privacy or compliance. That is something public EVM chains simply cannot offer.
This does not mean that Ethereum and other public chains are useless. They are incredibly powerful for open applications, retail finance, and experimentation. But they are not where regulated capital will live. That capital needs a different kind of infrastructure.
Dusk is building exactly that. It is not trying to replace Ethereum. It is trying to bring real financial markets onchain in a way that regulators, institutions, and users can all accept.
My take is that this distinction is going to become clearer over the next few years. We will not have one blockchain to rule them all. We will have specialized networks for different kinds of economic activity. Public EVM chains will continue to drive innovation at the edges. Networks like Dusk will handle the core of regulated finance. That is how Web3 grows up.
