According to TechFlow news on December 18, Bloomberg reported that Germany's largest bank, Deutsche Bank, is developing an Ethereum L2 blockchain based on ZKsync technology, aimed at addressing the compliance challenges financial institutions face when using public blockchains, particularly the risk of unintended transactions with sanctioned entities.
The L2 solution developed by the bank is named Project Dama 2, which will integrate directly with the Ethereum mainnet. The project design introduces a trusted validator mechanism and grants special oversight powers to regulators to mitigate the risk of interactions with sanctioned entities while ensuring a balance between blockchain transparency and financial compliance requirements. Deutsche Bank plans to launch a minimum viable product (MVP) in 2025 and is currently awaiting regulatory approval.
This project is an important part of the Monetary Authority of Singapore's Project Guardian initiative. Currently, 24 financial institutions, including Deutsche Bank, are participating in Project Guardian to explore blockchain-based asset tokenization.
