Deutsche Bank Working on Institutional Crypto Solution for Regulatory Hurdles: Report
Germany-headquartered Deutsche Bank is reportedly developing a solution for the regulatory challenges that financial institutions face when using public blockchains.
Bloomberg reports that the global investment bank is building a layer-2 blockchain for leading smart contract platform Ethereum ( ETH ) to address regulatory concerns of financial firms such as inadvertently dealing with criminals and sanctioned entities.
The layer-2 chain is incorporated in the firm’s multi-chain asset servicing pilot, Project Dama 2, which is part of the Monetary Authority of Singapore’s (MAS) Project Guardian initiative, a collaboration of 24 major financial institutions that explore asset tokenization.
Deutsche Bank’s Asia-Pacific industry applied innovation lead, Boon-Hiong Chan, says public blockchains such as Ethereum come with risks for regulated lenders such as not knowing who validates transactions, concerns over payment of transaction fees to sanctioned entities and threats of unforeseen hard fork.
Chan says the layer-2 solution can help address these issues. He says the platform will allow banks to curate a “more bespoke list of validators” and potentially grant regulators super admin rights that will enable them to scrutinize fund movements.
“Using two chains, a number of these regulatory concerns should be able to be satisfied. You are not dependent on the layer-1 for detailed transaction records anymore.”
The bank launched a test version of Dama 2 in November and is hoping to launch a minimum viable product by next year.
Don't Miss a Beat – Subscribe to get email alerts delivered directly to your inboxCheck Price Action
Follow us on X , Facebook and Telegram
Surf The Daily Hodl Mix
Generated Image: Midjourney
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
EU Commission approves Nvidia’s Run:ai acquisition
Share link:In this post: This followed a probe over competition concerns raised by Italian regulators. The EU Commission unconditionally approved the transaction. The Nvidia case is one of the many other probes into big tech firms’ acquisition of smaller companies.
SEC hits Jump Trading with $123m fine over TerraUSD scandal and Luna misconduct
Share link:In this post: SEC has fined Jump Trading $123 million over its role in the TerraUSD scandal. Tai Mo Shan agreed to settle the fine without admitting or refuting the charges. Jump Trading made more than $1 billion in profit in an arrangement with Terraform.
Shiba Inu advances DeFi strategy with Chainlink partnership
Chainlink's CCT standard allows Shiba Inu tokens to achieve interoperability and expand across 12 blockchains.
SEC Commissioner predicts early improvements for crypto ETFs under new leadership
Changes such as staking for Ethereum ETFs and in-kind redemptions for Bitcoin products will likely to happen early on, says Hester Peirce.