Deutsche Bank Develops Layer 2 Protocol for Blockchain Compliance

You can also read this news on COINTURK NEWS: Deutsche Bank Develops Layer 2 Protocol for Blockchain Compliance

Deutsche Bank, based in Germany, plans to develop a Layer 2 protocol to overcome compliance challenges associated with public blockchain technology. Named Project Dama 2, this initiative aims to integrate blockchain efficiency with regulatory requirements, combining traditional financial services with decentralized technology.

Announcing Layer 2 Solution

Under Project Dama 2, Deutsche Bank seeks to improve the efficiency of public blockchains through its Layer 2 protocol. This protocol will leverage ZKsync technology to reduce transaction costs and ensure that blockchain operations comply with regulatory standards.

Technological Features of Project Dama 2

This solution not only aims to decrease transaction costs but also enhances operational effectiveness, ensuring compliance with regulatory standards.

“By using two blockchains, many of these regulatory concerns can be addressed. This approach allows for a more selective and compliant framework while benefiting from public blockchain advantages.” – Boon-Hiong Chan, Deutsche Bank Asia-Pacific Innovation Leader

Public blockchains pose challenges, such as unintentional interactions with illegal actors or sanctioned assets. Deutsche Bank plans to overcome these obstacles by utilizing a selected list of validators that comply with strict standards. This approach aims to mitigate risks associated with blockchain transactions while preserving the scalability and interoperability of public networks.

To further enhance compliance, the platform offers “super admin rights” exclusive to regulators. This feature provides auditing authorities with tools to review fund movements, adding an extra layer of transparency and security to transactions.

Collaboration played a crucial role in the development of Project Dama 2. Deutsche Bank partnered with firms like Memento Blockchain Pte. and Interop Labs to integrate advanced technologies such as ZKsync. This collaboration is significant for ensuring the platform meets regulatory requirements and addresses the operational needs of financial institutions.

The bank plans to launch the minimum viable product (MVP) for Project Dama 2 by 2025, following regulatory approval. If successful, this initiative could serve as a model for other institutions considering the integration of blockchain technology in traditional finance.

By aligning blockchain technology with compliance through Project Dama 2, Deutsche Bank contributes to the acceleration of digital transformation in the financial sector. This move may facilitate similar technological adoptions by other financial institutions and pave the way for broader blockchain usage.

The post Deutsche Bank Develops Layer 2 Protocol for Blockchain Compliance appeared first on COINTURK NEWS.