- 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.
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.
The post Deutsche Bank Taps ZKsync and Ethereum for Regulatory-Compliant Blockchain Solution appeared first on Crypto News Land.
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