Discussion Paper: Designing an Ideal Open Blockchain for Institutions

Published November 2026

Executive Summary

Financial institutions (FIs) have expressed interest in using public blockchain networks, but also recognize that today’s networks do not meet their requirements. Both perspectives are valid: public blockchains offer distinct benefits, including neutral shared infrastructure, network effects and composability. However, they were built originally by communities of individual users, developers and node operators, and institutional requirements were not part of their initial design.

If we define “public blockchain” in its strictest sense and treat institutional requirements as fixed, then an institutional public blockchain may seem contradictory. This paper explores whether a middle ground can serve traditional institutions and regulators while also supporting the web3 community of individual users and developers. To do so, we examine the interests underlying each group’s position.

Terms such as “public”, “permissioned” and “decentralized” describe a range of properties, and separating these properties clarifies several points. Features often associated with decentralized blockchains, such as 24/7 availability, atomic settlement and programmability, do not require decentralized control and can also be provided by other modern technologies. Permissioning can be applied to specific rights, such as validation, without restricting all rights. Also, a network does not need to be public, or accessible to everyone, to be fair and neutral. It can still be open so long as a party that meets published, objective criteria is admitted, without relying on an operator's discretion.

Our view is that a blockchain that is fully decentralized, public and permissionless is unlikely to meet institutional needs. FIs must be able to screen their counterparties and the fee-receiving validators, protect client data, and act on legal orders such as asset freezes. Meeting these requirements necessitates either clearly defined authority or carefully calibrated restrictions on access. However, a credibly neutral, open, permissioned network, where participants are admitted against published, objective criteria and no single party controls the rules, could be possible.

A major contribution of this paper is a list of about 170 institutional requirements for a shared network, grouped into 21 categories under seven pillars: core ledger and protocol; security, resilience and service levels; interoperability and developer ecosystem; participant-level controls; transaction-level controls; data, legal and assurance; and governance, economics and change control. Most of these requirements add to what individual users and developers need, rather than conflicting with it. The list draws on J.P. Morgan’s experience both operating centralized systems such as the private permissioned blockchain operated by Kinexys, and using public blockchains like Ethereum and Base to deploy its token products. Not all requirements will prove necessary, and some may reflect assumptions shaped by centralized systems. The list is intended as a starting point for protocol developers and network operators seeking to support institutional use.

No network can satisfy every institutional requirement while preserving every property valued by public blockchain users. Setting out a comprehensive list of institutional requirements makes four types of tension explicit: among stakeholders, within institutions, with current technology, and with outdated regulation. This helps identify which tensions can be resolved and which require prioritization. Some obligations, such as sanctions compliance, cannot be waived, but there may be a choice about the layer at which they are met. Where controls can be applied at the asset or application layer rather than the network layer, obligations can be met while keeping the network as public as possible. Some, such as screening the validators that receive fees, can only be met at the network layer.

This is an interim discussion paper. Where our views are not yet settled, or where we find views are likely to differ, we identify the point as an area for review and discussion. We invite FIs, protocol developers, users and regulators to test our analysis, and we welcome disagreement as well as agreement.

This project was a collaboration with Kinexys Digital Payments at J.P. Morgan

Authors

Wee Kee Toh, Global Head of Insights, Kinexys by J.P. Morgan
Michael Maurer, Software Engineer, MIT Digital Currency Initiative
Angelo Aratan, Executive Director, Kinexys by J.P. Morgan
Giles Greene, University of Florida and Project Management for MIT Digital Currency Initiative
Alyssa Kong, Vice President, Kinexys by J.P. Morgan
Neha Narula, Director, MIT Digital Currency Initiative

This project is a part of the Future of Financial Infrastructure research track