Important points
Deutsche Bank is developing a layer 2 blockchain solution on Ethereum powered by ZKsync technology. The purpose of this project is to use public blockchain to address regulatory challenges for financial institutions and provide more efficient transactions.
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Germany's largest bank, Deutsche Bank, is developing an Ethereum Layer 2 network using ZKsync technology to increase transaction efficiency and meet financial regulatory standards, according to a new report from Bloomberg.
The effort is part of Project Dama 2, associated with Singapore's Project Guardian, and will address issues such as unknown transaction validators, risks of payments to sanctioned entities, and unexpected hard forks on public blockchains. It aims to solve important issues for regulated lenders operating in the
Boon Heong Chan, Head of APAC Securities Markets and Technology Advocacy at Deutsche Bank, said the goal is for banks to safely and securely use public blockchains for various financial services while addressing regulatory concerns. He said it should be made available.
He noted that the L2 solution will allow banks to create “a more bespoke list of validators” and provide regulators with “super admin powers” to monitor the movement of funds.
In November, the bank announced a test version of its wealth services pilot, Project Dama 2. Incorporating L2 solutions into Project Dama 2 is also expected to provide cost-effective benefits.
“With two chains, many of these regulatory concerns should be met,” Chan said.
“You no longer need to rely on Layer 1 for detailed transaction records,” he added.
Developed using ZKsync technology in collaboration with Memento Blockchain and Interop Labs, Project Dama 2 is part of the Monetary Authority of Singapore's Project Guardian. This wide-ranging effort includes 24 large financial institutions testing blockchain technology for the tokenization of assets.
The bank plans to launch a minimally viable product next year, subject to regulatory approval.
Deutsche Bank recently partnered with cryptocurrency exchange Crypto.com to enhance its corporate banking services in Asia Pacific. The partnership, announced on December 10, will initially focus on providing banking capabilities in Singapore, Australia and Hong Kong, with plans to expand to Europe and the UK in the future.
The partnership is part of Crypto.com's broader global expansion strategy, which includes launching new products such as stablecoins and ETFs by 2025.
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