According to Odaily Planet Daily, Deutsche Bank is working to address the regulatory challenges that financial institutions face when using public blockchains. The bank launched a beta version of its asset servicing pilot project Project Dama 2 in November, which includes Layer 2.
Boon-Hiong Chan, head of industry application innovation for Asia Pacific at Deutsche Bank, said the bank's Layer 2 is connected to Ethereum. Public blockchains pose risks to regulated lenders, including the unknown identity of transaction validators and the risk of transaction fees being paid to sanctioned entities.
Dama 2 is part of the Monetary Authority of Singapore’s “Project Guardian”, which aims to test blockchain technology to tokenize assets. The platform was developed in partnership with Memento Blockchain Pte. and Interop Labs and is built using ZKsync technology.
Deutsche Bank plans to launch Dama 2 as a minimum viable product next year after obtaining regulatory approval. Its Layer 2 component allows the bank to curate a custom validator list and potentially give regulators super administrator privileges.