• Deutsche Bank builds Layer-2 blockchain on Ethereum using ZKsync to enhance compliance and transaction efficiency.
  • Project Dama 2 by Deutsche Bank focuses on secure asset tokenization and regulatory-friendly blockchain solutions.
  • Deutsche Bank’s Ethereum-based blockchain uses ZKsync to lower costs, ensure privacy and streamline financial operations.

Deutsche Bank is developing a blockchain platform to address regulatory concerns in using public blockchains for financial transactions. The German banking giant is building a Layer-2 blockchain on Ethereum, leveraging ZKsync’s zero-knowledge proof technology. 

JUST IN: 🇩🇪 Germany's largest bank, Deutsche Bank, is developing its own Ethereum L2 blockchain based on ZKsync 🚀

— Crypto India (@CryptooIndia) December 18, 2024

The initiative, called Project Dama 2, aims to streamline asset servicing while ensuring compliance with financial regulations.

Project Details and Objectives

The platform was unveiled as a pilot in November and is part of the Monetary Authority of Singapore’s Project Guardian . Project Guardian includes 24 financial institutions exploring blockchain-based asset tokenization. 

Deutsche Bank’s platform focuses on creating a secure, compliant environment for blockchain use in traditional finance. It allows for cheaper, faster transactions while maintaining privacy and regulatory oversight.

To mitigate risks, the platform will use a curated list of validators. This reduces the chances of engaging with sanctioned entities. The technology also offers regulators enhanced oversight through special administrative tools.

Collaboration and Technology

Crypto firms Memento Blockchain and Interop Labs are contributing to the project’s development. The platform incorporates ZKsync’s zero-knowledge proof system to enhance transaction efficiency. This technology minimizes transaction costs while ensuring user privacy and data customization. The solution also reduces reliance on Ethereum’s main Layer-1 chain for transaction records.

Deutsche Bank plans to release the platform’s first version by 2025, pending regulatory approval. The initiative signals a growing interest in blockchain technology among traditional financial institutions.

Broader Implications for Traditional Finance

Other major financial players are also exploring blockchain applications. JPMorgan recently conducted its first public blockchain transaction under Project Guardian. Visa is working on tokenizing fiat currencies for banks. Additionally, BlackRock and Franklin Templeton have already tokenized money funds worth over $1 billion.

The project demonstrates the growing use of blockchain in traditional finance. It aims to combine the advantages of Ethereum’s technology with improved security and compliance. The platform could serve as a model for other organizations seeking to incorporate blockchain technology into their operations.

disclaimer read more

Crypto News Land, also abbreviated as "CNL", is an independent media entity - we are not affiliated with any company in the blockchain and cryptocurrency industry. We aim to provide fresh and relevant content that will help build up the crypto space since we believe in its potential to impact the world for the better. All of our news sources are credible and accurate as we know it, although we do not make any warranty as to the validity of their statements as well as their motive behind it. While we make sure to double-check the veracity of information from our sources, we do not make any assurances as to the timeliness and completeness of any information in our website as provided by our sources. Moreover, we disclaim any information on our website as investment or financial advice. We encourage all visitors to do your own research and consult with an expert in the relevant subject before making any investment or trading decision.