Deutsche Bank Tackles Blockchain Risks with Zksync-Powered L2
Deutsche Bank, a global banking and financial services company, is addressing the compliance challenges of public blockchains with the launch of Layer-2 (L2). The company focuses on digital disruption, sustainability and innovation.
This marks a bold step towards integrating blockchain technology into traditional financial (TradFi) services as Deutsche Bank tackles one of the most significant obstacles facing regulated institutions.
Deutsche Bank tackles public blockchain compliance challenges
Compliance risks for public blockchains are one of the most significant obstacles facing regulated institutions. With the latest solutions, Dama Plan 2Deutsche Bank introduced a new framework aimed at alleviating regulatory concerns. It also hopes to leverage the efficiency and cost-effectiveness of blockchain.
Launched in November, Project Dama 2 is an asset servicing pilot project as Monetary Authority of Singapore (MAS) Guardian Program. The plan involves 24 major financial institutions and attempts to use blockchain technology to tokenize assets.
Deutsche Bank’s contributions include “Tier 2” protocol that enhances public blockchains such as Ethereum. Specifically, it makes transactions more cost-effective and efficient.
“With two chains, many regulatory issues should be able to be addressed. This approach allows us to create a more curated and compliant framework while leveraging the advantages of public blockchain networks.” Bloomberg quoted Deutsche Bank Asia Pacific Industry Application In the words of Boon-Hiong Chan, Head of Innovation.
At the same time, public blockchains such as Ethereum, while promising, also present a unique set of risks for financial institutions. These include the possibility of unknowingly interacting with criminals, sanctioned entities, or unverified validators. There is also a risk of vulnerabilities resulting from unforeseen events, e.g. hard fork This could disrupt the digital ledger.
Deutsche Bank’s Layer-2 aims to solve these problems by creating a customized list of validators that meet strict compliance standards. L2 solutions also include advanced features such as China Science and Technology Synchronization Technology to improve transaction efficiency Safety.
One of the key innovations is the introduction of “super administrative powers” for regulators. This feature gives regulators the ability to exclusively scrutinize capital movements when necessary, adding an additional layer of trust and transparency.
Resolve compliance issues And why public blockchains matter
The potential of public blockchains lies in their revolutionary capabilities Asset Tokenization and address margin compression in financial services. However, for banks, venturing into the crypto ecosystem is fraught with challenges.
Questions remain about the extent to which TradFi should participate in decentralized systems. Chen emphasized the importance of mitigating risks while not overlooking opportunities.
“Public blockchains offer unparalleled scalability and interoperability, but compliance remains critical,” he said.
By plugging into Ethereum, one of the most widely used commercial blockchains, Deutsche Bank’s solution aims to create a bridge between TradFi and decentralized technologies. In addition to being more efficient, Layer 2 protocols provide a way to maintain detailed transaction records independent of the underlying Tier 1 Blockchain.
At the same time, the development of Project Dama 2 reflects the importance of cooperation in advancing blockchain technology. Deutsche Bank partners with cryptocurrency company Memento Blockchain Pte. and Interoperability Labs to turn this vision into reality. The success of this project can serve as a model for other financial institutions dealing with similar challenges.
Deutsche Bank plans to launch a minimum viable product (MVP) for Dama 2 next year, pending regulatory approval. The platform could pave the way for wider adoption of public blockchains in financial services. Such results will set new standards for compliance and innovation.
Disclaimer
follow trust project BeInCrypto is committed to fair and transparent reporting. This news article is designed to provide accurate and timely information. However, readers are advised to independently verify the facts and consult a professional before making any decisions based on the content of this article. Please note that our terms and Conditions, privacy policyand Disclaimer Updated.
