Deutsche Bank develops Ethereum L2 with ZKsync to tackle sanctions risks
The project, part of the Dama 2 initiative
According to a Bloomberg report, Germany's banking giant Deutsche Bank is developing an Ethereum Layer 2 network using ZKsync technology.
The initiative aims to address regulatory challenges for financial institutions utilizing public blockchains while improving transaction efficiency.
The project, part of the Dama 2 initiative, is being developed in collaboration with Memento Blockchain and Interop Labs. It is also linked to Singapore's Project Guardian, which focuses on resolving key issues for regulated banks, such as unknown transaction validators, payment risks to sanctioned entities, and unexpected hard forks.
Aiming for global adoption
"The L2 solution will enable banks to create more customized validator lists and grant regulators super-administrator rights to monitor fund movements," explained Boon-Hiong Chan, Head of Securities Markets, APAC, and Technology Advocacy at Deutsche Bank.
He further noted that banks will no longer rely on Layer 1 blockchains for detailed transaction records.
If regulatory approval is obtained, Deutsche Bank plans to launch a minimum viable product as early as next year.
Recently, the German banking giant also partnered with cryptocurrency exchange Crypto.com to provide corporate banking services in Singapore, Australia, and Hong Kong, with plans for future expansion into Europe and the United Kingdom.
The Monetary Authority of Singapore (MAS) has announced ambitious plans to drive tokenisation in financial services through a series of strategic initiatives.
These efforts aim to deepen liquidity, develop market infrastructure, establish industry frameworks, and provide access to settlement facilities for tokenised assets, MAS reports.
