German bank initiates blockchain development using Layer 2 technology
Deutsche Bank, one of the world's leading financial institutions, is taking strides in the blockchain space. The German bank is developing a Layer-2 blockchain on Ethereum, designed to cater to industries that require high performance and regulatory compliance.
Part of this ambitious project is Project Dama 2, an initiative that falls under the Monetary Authority of Singapore's Project Guardian. This partnership demonstrates Deutsche Bank's commitment to evolving traditional finance to embrace the benefits of decentralisation.
The bank's L2 blockchain uses curated trusted validators and tools that provide regulators with special oversight capabilities. This integration with Ethereum aims to deliver scalability and transparency while adhering to regulatory requirements.
Deutsche Bank's blockchain solution employs ZKsync technology to address compliance challenges, mitigating risks like inadvertent interactions with sanctioned entities. The platform's features, such as 'super admin rights', allow regulators to monitor and audit transactions, making it a potential game-changer in regulated environments.
However, the exact timing of the L2 blockchain platform's availability is yet to be determined, as regulatory approval plays a crucial role in its deployment. There are no publicly available details or confirmed release dates for the platform as a minimally functional product.
Deutsche Bank's blockchain adoption could pave the way for broader blockchain adoption in the financial sector. If successful, this initiative could inspire other financial institutions to explore blockchain solutions like asset tokenisation and decentralised networks.
In addition to its blockchain endeavours, Deutsche Bank has partnered with Crypto.com for corporate banking services in the Asia-Pacific region. The partnership includes fiat-to-cryptocurrency exchange and cross-border trading in key markets like Singapore, Australia, and Hong Kong.
Looking ahead, Deutsche Bank aims to expand its partnerships to the United Kingdom and parts of Europe. The bank also plans to launch its L2 blockchain platform as a minimum viable product by 2025.
As we witness the evolution of blockchain technology in the financial sector, it's clear that Deutsche Bank's initiatives are setting a precedent for a more decentralised future.
This article was written by Muhammad Zulhusni, a tech journalist specialising in cloud computing, cybersecurity, and disruptive technology in the enterprise industry.
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