https://archive.is/dY9Ym

Deutsche Bank is addressing regulatory challenges associated with the use of public blockchains, particularly the risks of inadvertently interacting with criminals or sanctioned entities. The bank recently introduced a test version of Project Dama 2, which features a Layer 2 solution designed to facilitate cheaper and more efficient transactions by leveraging public blockchain technology, specifically Ethereum. This initiative is part of the Monetary Authority of Singapore's Project Guardian, where 24 financial institutions are exploring blockchain applications for asset tokenization.

Deutsche Bank aims to mitigate risks related to transaction validation and the potential for fees to be paid to sanctioned entities. The Layer 2 component allows for a curated list of validators, enhancing control over digital asset transactions. Additionally, it offers regulators super admin rights to monitor fund movements when necessary. The Dama 2 platform is developed in collaboration with crypto firms Memento Blockchain Pte. and Interop Labs, utilizing ZKsync technology.

The bank plans to launch a minimum viable product next year, pending regulatory approval. This move indicates Deutsche Bank's belief in the potential of blockchain technology to address margin pressures in financial services while navigating the complexities of the crypto ecosystem.