Permissioned vs Public Blockchain: The Enterprise DLT Decision in Switzerland

The most consequential technology decision for any enterprise DLT deployment is the choice between a permissioned blockchain and a public blockchain. This choice carries implications that extend far beyond technical architecture: it determines who can participate, who can see transaction data, how regulatory accountability is assigned, what smart contract capabilities are available, and what the ongoing cost and governance structure of the platform looks like. In Switzerland’s DLT landscape — shaped by the Swiss DLT Act’s technology-neutral framework and by FINMA’s institution-focused regulatory philosophy — both permissioned and public blockchain architectures are in live institutional use. Understanding the trade-offs between them is essential to understanding Switzerland’s DLT market.

Public Blockchains: Permissionless by Design

Public blockchains — Ethereum, Polkadot, Solana, Avalanche, and others — are defined by their permissionlessness. Any party can read the blockchain, submit transactions, and (in some protocols) participate in validation, without seeking admission from any authority. This architectural choice was not accidental: the original impetus for blockchain technology was the creation of financial infrastructure that could not be controlled, censored, or shut down by any single entity, whether a government, a corporation, or a central bank.

Public blockchains achieve their security properties through decentralisation: because thousands of independent validators worldwide must agree on the state of the ledger, the cost of attacking the network — corrupting the ledger, reversing transactions, or censoring participants — is extremely high. Ethereum’s proof-of-stake network requires an attacker to control a majority of staked ETH (currently worth hundreds of billions of dollars) to mount a successful attack. This security guarantee is genuinely valuable and genuinely distinct from what permissioned blockchain networks can offer.

The permissionlessness that provides these security properties also creates the primary institutional challenge. When a regulated financial institution participates in a regulated financial activity on a public blockchain, a fundamental question arises: who is the regulated entity responsible for the platform’s compliance with financial market law? On Ethereum, there is no entity that holds a licence, meets capital requirements, or can be named as the counterparty in a regulatory action. The Ethereum Foundation is a non-profit organisation that develops software; it does not operate Ethereum in the sense that SIX Group operates the Swiss Stock Exchange.

This compliance question is not merely theoretical. Swiss financial market law requires that market infrastructure — exchanges, central securities depositories, payment systems — be operated by identifiable, licensed entities. FINMA cannot supervise “Ethereum.” It can supervise SIX Digital Exchange AG — a Swiss company with defined governance, ownership, and regulatory obligations.

Permissioned Blockchains: Control in Exchange for Decentralisation

Permissioned blockchain platforms — R3 Corda, Hyperledger Fabric, Quorum (ConsenSys), and others — invert the public blockchain model. Participation requires admission by the network operator. The validator set is controlled and known. Transaction visibility is configurable: parties can choose to share transaction data only with counterparties and designated observers (such as regulators), rather than broadcasting to all participants.

R3 Corda was designed explicitly for financial market infrastructure and financial institution use. Its transaction model is bilaterally-oriented: a Corda transaction involves only the parties to that transaction, plus any designated observers (regulators, auditors, infrastructure operators). Corda has no global broadcast of transactions, no public mempool, and no speculative ordering of transactions by validators. A Corda network is a set of nodes operated by identified participants, communicating peer-to-peer and verifying transactions using a notary service operated by a trusted entity within the network.

Corda’s approach maps naturally onto the legal structure of financial contracts. A bond issuance on SDX involves identifiable parties — the issuer, the initial subscribers, the SDX operator, and FINMA as regulator with supervisory access — not a permissionless universe of anonymous participants. The legal transfer of a DLT security is effected by the on-chain transaction, and both parties to that transfer must be identified, licensed, and compliant with Swiss financial market law.

Hyperledger Fabric, developed under the Linux Foundation’s Hyperledger umbrella, takes a similar permissioned approach but with a different architecture. Fabric uses a channels model, where different subsets of the network can share different data channels — enabling fine-grained control over which participants see which transactions. Fabric has been widely adopted in supply chain, trade finance, and identity management applications where data privacy between competitors on the same network is a commercial necessity.

Swiss Examples: The Market Has Chosen Permissioned

In Switzerland’s institutional DLT market, the market has overwhelmingly chosen permissioned blockchain infrastructure.

SIX Digital Exchange is built on R3 Corda. The choice reflects SDX’s regulatory requirements (FINMA cannot supervise a system with anonymous participants), its settlement requirements (atomic, final settlement of real financial instruments requires a controlled, identifiable participant set), and its data privacy requirements (competitive trading information must be confidential between counterparties).

Komgo — Geneva’s commodity trade finance blockchain — operates on an Ethereum-based permissioned network. This is not the public Ethereum mainnet; it is a private instance of the Ethereum protocol with a controlled participant set and private transaction data. The use of Ethereum’s smart contract architecture provides access to its rich smart contract capabilities and developer tooling while the permissioned deployment addresses the trade finance industry’s data confidentiality requirements.

B3i (the insurance blockchain consortium, dissolved 2022) was built on R3 Corda, reflecting the reinsurance industry’s requirement for contract data confidentiality between competitor insurers and reinsurers.

The Swiss DLT Act: Technology-Neutral, Not Platform-Prescriptive

The Swiss DLT Act’s definition of a DLT security is deliberately technology-neutral. The Code of Obligations’ requirements for a distributed register — tamper-resistance, participant access, and independent exercise of rights — describe functional properties, not technical architectures. Both a Corda-based permissioned network and an Ethereum-based public blockchain can in principle satisfy these requirements, provided the specific implementation meets the statutory criteria.

This technology neutrality was a conscious legislative choice. The Federal Council’s accompanying dispatch to the DLT Act explicitly declined to prescribe any specific blockchain technology, acknowledging that the field was evolving rapidly and that any technology prescription in statute would become outdated. FINMA has taken a similarly technology-neutral stance in its supervisory practice — it regulates outcomes and risk management, not the specific distributed ledger technology chosen.

In practice, this means that the DLT securities market is not limited to Corda or to permissioned networks generally. Sygnum Bank has issued DLT securities using Ethereum-based infrastructure, demonstrating that public blockchain (or Ethereum’s smart contract architecture in a more controlled deployment) is compatible with the Swiss DLT Act’s requirements where the implementation satisfies the statutory technical criteria.

Hybrid Approaches: Bridging the Divide

The binary between “public blockchain” and “permissioned blockchain” is increasingly blurred by hybrid architectures that seek to capture the security guarantees of public networks while providing the privacy and control of permissioned systems.

Zero-knowledge proof based systems — Polygon CDK, zkSync Era, StarkNet — enable computationally private transactions to settle on the Ethereum mainnet, inheriting Ethereum’s decentralisation and security while keeping transaction details off the public record. A financial institution can conduct a private transaction on a ZK-rollup and post a cryptographic proof of that transaction’s validity to Ethereum, achieving both privacy and public chain security anchoring.

Layer 2 enterprise deployments — where an organisation operates a private rollup or sidechain with its own participant controls, but periodically anchors state to Ethereum mainnet — are an emerging architecture for institutional applications that want access to Ethereum’s developer ecosystem and eventual security guarantees without requiring all transactions to be public.

These hybrid approaches remain relatively early-stage in Swiss institutional deployments as of 2026, but they represent the medium-term direction of travel. The convergence of public and permissioned architectures — driven by privacy technology improvements and the growing institutional credibility of public blockchain networks — is likely to reduce the starkness of the current enterprise/public divide over the next five years.

The 2024 Trend: Public Chains in Institutional Deployments

The most significant development in the permissioned-versus-public debate has been the emergence of major institutional deployments on public blockchain infrastructure.

BlackRock’s BUIDL fund — a $500 million tokenised money market fund launched on the Ethereum mainnet in 2024 — represents the clearest signal yet that public blockchain is acceptable to the world’s largest asset manager for regulated financial products. BUIDL uses a permissioned token standard (only KYC-verified, whitelisted addresses can hold BUIDL tokens), but it settles on Ethereum mainnet and is publicly auditable in a way that Corda-based systems are not.

Franklin Templeton’s BENJI operates on the Stellar and Polygon public blockchains — both significantly smaller than Ethereum but with faster and cheaper transaction processing.

These US-based institutional deployments on public chains are a relevant data point for Swiss institutional actors. They suggest that the compliance challenge of public blockchain — “who is the regulated entity?” — can be addressed at the token level (through whitelisting and transfer restrictions) rather than requiring an entirely permissioned infrastructure layer. The Swiss DLT Act’s technology-neutral framework accommodates this approach, provided the DLT security’s register meets the statutory requirements regardless of whether the underlying blockchain is public or permissioned.

Making the Enterprise Choice

For Swiss enterprises evaluating a DLT deployment, the key decision factors remain consistent:

Regulatory compliance is typically the first gate. FINMA-regulated activities require identifiable participants and auditability. Permissioned networks with defined participant sets satisfy these requirements most directly; public networks require additional permissioning layers at the token or smart contract level.

Data privacy under the Swiss FADP and EU GDPR requires that personal data be accessible only to authorised parties. Public blockchains, where all transaction data is visible to all participants, require off-chain privacy solutions (ZK proofs, off-chain data storage) to achieve compliance. Permissioned networks with configurable transaction visibility handle this natively.

Transaction throughput and cost favour public layer-2 networks and permissioned networks over Ethereum mainnet. High-volume applications — payments, trade finance, corporate actions — require throughput that Ethereum mainnet cannot economically provide at current usage levels.

Smart contract capabilities and developer ecosystem favour Ethereum-compatible platforms, which benefit from the largest global developer community, the most extensive tooling, and the deepest auditability of smart contract code. Corda’s smart contract model (CorDapps) is powerful but more specialised.

Governance and vendor dependency may push organisations toward open-source permissioned platforms (Hyperledger Fabric) or public blockchain networks over commercial permissioned systems, to avoid lock-in to a specific vendor’s roadmap and pricing.

There is no universal answer. Switzerland’s DLT market demonstrates that both permissioned and public blockchain architectures can produce real institutional deployments — the choice depends on the specific regulatory, commercial, and technical requirements of each application.

Related Coverage

• Hyperledger Fabric in Swiss Enterprise: Banking, Trade Finance, and Supply Chain Applications
• Enterprise Blockchain in Switzerland: Industries, Projects, and Adoption Reality
• SIX Digital Exchange: The World’s First Regulated DLT Securities Exchange
• The Swiss DLT Act: A Complete Analysis of the World’s Leading DLT Legislation
• Distributed Ledger Technology (DLT): Definition and Types

Donovan Vanderbilt is Editor of ZUG DLT, published by The Vanderbilt Portfolio AG, Zurich. This analysis is for informational purposes only and does not constitute legal or investment advice. See our full Disclaimer.