Three institutional blockchain networks, Arc, Canton, and Tempo, have raised more than $1 billion combined at valuations exceeding $10 billion, with all rounds closing between October 2025 and May 2026. Goldman Sachs, Stripe, BlackRock, Paradigm, and a16z are backing a single thesis: public blockchains like Ethereum are too transparent for banks, and configurable privacy is the fix.
Matt Hougan, CIO of Bitwise, put it plainly in a blog post on May 12, 2026: “If you're a company broadcasting every transaction before it's complete, or a worker whose salary is visible to anyone with a block explorer, that transparency is a bug, not a feature.” A salary paid in USDC on Solana is public. Any competitor trading against a hedge fund on Ethereum can see the position forming in real time, down to the millisecond, and front-run it. That openness was a feature when blockchain meant Bitcoin and cypherpunk philosophy. For banks, it's a liability.
Goldman, Stripe, BlackRock, and Paradigm don't invest on principle. They invest because the institutions they want to bring on-chain won't come near Ethereum or Solana in their current form.
Hougan called this convergence the clearest signal yet that privacy is the next “killer app” of crypto.
Three Blockchains, One Institutional Problem
Canton, built by Digital Asset Holdings, carries the longest institutional pedigree of the three. Goldman Sachs, DRW, Citadel Securities, DTCC, Tradeweb, BNY Mellon, Nasdaq, and S&P Global are already live on the network. In February 2026, a consortium of major financial institutions used Canton to execute the world's first intraday cross-border repurchase agreement, settled using tokenized UK gilts from a market worth $2 trillion.
Visa became a Super Validator on Canton in March 2026. The following month, Visa included Canton in its stablecoin settlement pilot alongside Base, Polygon, Arc, and Tempo. The closing funding round, approximately $300 million led by a16z crypto, would bring Canton's total well above $300 million. The network uses the open-source Daml smart contract language and has already processed more than $6 trillion in tokenized assets. Its core differentiator from Ethereum is straightforward: transactions are private by default, with data disclosed only to authorized counterparties.
Tempo was incubated inside Stripe and Paradigm, the fund co-founded by former Coinbase president Fred Ehrsam. According to The Block's reporting, Tempo raised $500 million at a $5 billion valuation in October 2025. Its focus areas are cross-border payments, FX settlement, and corporate treasury management: precisely the use cases where Ethereum's public ledger creates immediate operational headaches.
Arc completes the trio with what a16z partners Ali Yahya and Noah Levine described in their investment memo as an “economic operating system” approach: gas fees denominated in USDC, half-second finality, selective privacy, and EVM compatibility. a16z wrote that “a handful of blockchains will emerge as the new backbone of the financial system” and that Arc is well-positioned to be one of them. Arc raised $222 million from investors including BlackRock and a16z.
Why Banks Want Private Blockchains, Not Ethereum
Functionally, the answer is both operational and strategic. On the operational side, banks are legally required to protect client information. Settling a corporate wire transfer on Ethereum means broadcasting the details to every node on the network in real time, including rivals, regulators in foreign jurisdictions, and traders who can use that information to front-run the transaction before it clears. On the strategic side, banks want to control who sees what on their infrastructure.
The “configurable privacy” that Arc, Canton, and Tempo offer addresses both concerns. Institutions choose which transactions to disclose, to whom, and for how long, while satisfying KYC and AML requirements. This is not the absolute privacy of Monero. It is selective, auditable privacy, compatible with compliance frameworks including DAC8, the EU directive extending automatic tax data exchange to crypto-asset service providers. The connection to the U.S. Clarity Act currently moving through the Senate is direct: if stablecoins cannot generate passive yield, the infrastructure layer on which stablecoins operate becomes the primary source of differentiated value. Whoever controls institutional Layer 1 networks controls settlement fees, governance rules, and ultimately the industry's margin structure.
What This Means for Retail Crypto Users
Hougan identifies three forces behind the funding surge: the GENIUS Act providing the regulatory certainty institutions needed to commit capital, rising corporate demand for private on-chain transactions, and competition among corporate-backed networks pushing each player to differentiate through privacy. The retail picture is less direct but not less significant. This capital is not building a consumer layer. It is building the infrastructure banks will use to issue their own stablecoins, settle their own securities, and manage their own treasury operations on-chain.
Retail users will interact with that infrastructure through their exchange account or bank app, without knowing Canton or Arc sits underneath. The open question is whether holders of the ARC token or assets tied to the underlying chains will capture any of the value flowing through those rails.
According to Coinbase Research's January 2026 forecast, privacy tokens were projected to reach $100 billion in market capitalization by year-end. The data already available supports the direction: per CoinGecko, Zcash posted a 691% gain in 2025 and Monero rose 143% over the same period. On May 12, 2026, five spot XRP ETFs listed in the United States recorded $25.8 million in net inflows, the largest single-day figure since the regulatory deadlock ended, according to Bloomberg. The same day, DTCC announced expanded integration plans with Canton, underlining how quickly the institutional infrastructure layer is taking shape.
For retail investors watching this space, the clearest near-term signal to monitor is the closing of Canton's $300 million a16z round and any regulatory language in the Clarity Act that touches settlement infrastructure. Those two events will set the commercial terms under which institutional privacy blockchains operate in the U.S. market for the next several years.
