Deutsche Bank is working on a Layer 2 (L2) blockchain solution on Ethereum based on ZKsync technology. The aim of the project is to address compliance challenges when using public blockchains in regulated financial systems. This effort, known as Project Dama 2, is part of the larger initiative Project Guardianwhich from the Monetary Authority of Singapore (MAS) was launched. This includes several financial institutionswho are working on tokenization of assets.
Focus on compliance and security
According to Bloomberg Deutsche Bank aims to establish a network of trustworthy validators that meets regulatory requirements. A key goal is to integrate controls to minimize risks such as transactions with sanctioned entities. In addition, regulatory authorities should have direct access to the transactions via special audit and monitoring rights. This ensures the balance between innovation and compliance with legal requirements.
https://twitter.com/zksync/status/1869465841752064473
Choosing Layer 2 technologies such as ZKsync allows Deutsche Bank to significantly increase the efficiency of transactions. These technologies offer faster and more cost-effective processing while improving scalability. In addition, ZKsync provides tools for regulatory requirements, such as “super admin rights” that allow comprehensive monitoring and auditing of activities. These functions make the technology particularly suitable for use in regulated financial markets.
Target: market launch in 2025
Deutsche Bank plans to do so by 2025 Minimum Viable Product (MVP) their Blockchain-to bring the solution to market. However, this requires approval from the relevant regulatory authorities. If the project is successful, it could serve as a model for other financial institutions that also want to integrate blockchain technologies into their operations – particularly in the areas of asset management and cross-border payments.
At the same time, Deutsche Bank is increasing its global activities in the blockchain sector. On December 10, it announced a partnership with Crypto.com to offer corporate banking services in the Asia Pacific region, as we recently reported in our Crypto News have written. This collaboration includes fiat-to-crypto exchanges and cross-border trading solutions. The bank also plans to establish partnerships in the UK and other European countries to further expand its leadership in the integration of blockchain technologies.
https://twitter.com/cryptocom/status/1866380702809309228?s=31
With Project Dama 2, Deutsche Bank shows how traditional financial institutions can use blockchain technologies to combine innovation and regulatory requirements. If the planned steps are successful, the project could lay the foundation for broader acceptance of blockchain in the financial sector and permanently change the way financial services are delivered.