Traditional financial institutions have also begun to move towards Layer 2. Deutsche Bank is launching an Ethereum-based Layer 2 solution called Project Dama 2. The beta version was launched in November and is expected to be officially launched next year after regulatory approval. (Previous summary: Europe’s largest) Deutsche Bank cooperates with Bitpanda exchange: providing users with instant fiat currency deposit and withdrawal services) (Background supplement: There is a huge demand for Euro stablecoins! Jointly issued by the three giants of Deutsche Bank, Flow Traders, and Galaxy Digital) Traditional financial institutions I also started to work on Layer 2. Boon-Hiong Chan, Deutsche Bank's head of industry application innovation in the Asia-Pacific region, recently revealed to the outside world that Deutsche Bank is launching a Layer 2 solution based on Ethereum. The project is called Project Dama 2, and its beta version has been launched in November. , is expected to be officially launched next year after regulatory approval. This move not only marks the further exploration of traditional financial institutions in the field of blockchain, but may also start a new trend in which secure and compliant blockchain solutions are introduced into the core of traditional finance, further increasing the adoption rate. Based on the ZKsync Stack, multiple use cases are being tested. Deutsche Bank's Project Dama 2 is also part of the "Guardian Project" of the Monetary Authority of Singapore (MAS) in Singapore. It is a collaborative initiative between policymakers and the financial industry that aims to increase the liquidity and efficiency of financial markets through the tokenization of assets. A total of 27 industry organizations participated in Project Guardian, including Ant Group, ANZ, Bank of New York Mellon, Citibank, DBS Bank of Singapore, Fidelity, Franklin Templeton, HSBC, JPMorgan Chase, Moody's, UBS, Standard Chartered Bank, S&P Global, etc. It also includes a series of associations and cooperative organizations, such as SWIFT, as well as policy-making institutions such as central banks and the World Bank. Memento Blockchain and Interop Labs are Deutsche Bank’s technology partners helping Project Dama 2 develop its minimum viable product. Specifically, Memento Blockchain has developed a fully functional testnet of the public permissioned chain Memento ZKchain.The testnet is built on the ZKsync Stack, supported by Matter Labs, and achieves cross-chain interoperability through the Axelar network, supported by Interop Labs. The main features of Memento ZKchain include: · Digital identity based on Soulbound Token: a secure and immutable identity system for permission management and facilitating KYC, AML, sanctions checks and investor suitability testing . · Paymaster function: designed to simplify gas fee management through traditional payment channels and provide a clear audit trail for gas fee payments. · Customized blockchain browser: Designed to manage on-chain transaction confidentiality while retaining full regulatory review capabilities. · Creation and issuance of tokenized funds: realized through the Domani Protocol decentralized application (dApp), supporting the establishment and distribution of tokenized traditional investment funds, hybrid funds that combine digital and traditional assets, or completely native digital funds. In addition, Interop Labs has implemented comprehensive cross-chain connectivity between the Memento ZKchain testnet and Avalanche Fuji and Stellar through the Axelar network. This feature supports integration with more than 69 blockchain networks, improving the accessibility, secure scalability, and customization capabilities of financial applications. Currently, Project Dama 2’s project team is testing multiple use cases, including the issuance and distribution of tokenized funds on a single or multiple blockchains, the interoperability of digital assets and digital cash circulation, as well as measures to improve asset security and Near-instant settlement achieved due to operational efficiency. Traditional banks have entered Layer 2. Deutsche Bank is building on ZKsync and has tested multiple use cases to explore how to deal with the compliance challenges of financial institutions using public blockchains. Deutsche Bank’s upcoming Layer 2 aims to address the challenges faced by financial institutions when using public blockchains. Compliance challenges such as unknown transaction validators, fees flowing to sanctioned entities, and hard fork risks. Its project leader believes that public chains such as Ethereum are full of risks for regulated lending institutions. These include the inability to determine “who is actually validating these transactions,” whether transaction fees may be paid to sanctioned entities, and the threat of significant changes to the ledger due to unforeseen hard forks. And Layer 2 components may give banks the freedom to experiment with public chains. This will enable banks to customize a “more personalized list of validators” who process digital asset transactions to earn rewards. Other benefits include the possibility of giving regulators – and regulators only – “super admin rights”, meaning they can review fund flows if necessary. “By using a dual-chain architecture, many of these regulatory concerns should be able to be addressed,” he said. Advocates including Deutsche Bank see blockchain as an opportunity to combat margin compression in the financial services industry. However, some questions remain about how deeply banks should be involved in the crypto ecosystem. Crucially, crypto industry insider AdrianoFeria.eth believes that the level of regulatory compliance required by these agencies is impossible to achieve on any Layer 1 blockchain. For institutions that require strict oversight and interoperability, the only pragmatic options are to run their own private, permissioned Layer 1 chain, or to leverage Ethereum’s L2 ecosystem. Deutsche Bank is continuing to make plans in the encryption field. Deutsche Bank will make frequent moves in the encryption field in 2024. Back in June, Deutsche Bank provided BitPanda with an API-based account solution, giving it access to German International Bank Account Numbers (IBANs), an internationally recognized code that helps banks securely process international transfers. BitPanda plans to use this service to improve the efficiency and security of fund transfers. In addition, Deutsche Bank is providing multi-currency accounts and FX services to crypto market maker Keyrock to help it optimize and expand its market making and over-the-counter (OTC) services in the EMEA, APAC and LATAM regions. On November 27, Deutsche Bank joined Partior, a Singapore-based blockchain financial technology company, in its Series B financing as a strategic investor to support Partior in expanding its cross-border settlement capabilities and developing functions such as instant foreign exchange swaps and multi-bank payments. On December 10, Deutsche Bank also announced a cooperation with Crypto.com to provide services in Singapore, Australia...