Tanahub.com — One of Germany’s largest banks, Deutsche Bank, has introduced Project Dama 2, an Ethereum-based layer 2 (L2) blockchain. This project aims to leverage blockchain technology to enhance the efficiency of financial transactions while ensuring compliance with applicable regulations.
According to Bloomberg, Project Dama 2 will be developed using the zk Stack toolkit from zkSync. This technology enables more cost-efficient, faster transactions while offering enhanced privacy. To support the development of this platform, Deutsche Bank is collaborating with blockchain companies such as Memento Blockchain and Interop Labs.
Deutsche Bank, in collaboration with @Memento_Bc, is building a layer 2 on Ethereum using @zksync‘s tech stack. https://t.co/I8FOkLordO
— Memento Blockchain (@Memento_Bc) December 19, 2024
As reported by CoinDesk, Project Dama 2 is a public permissioned blockchain. This means that all transactions on the network are publicly viewable, but participation within the network is privately regulated. Certain actions, such as becoming a network validator, are only granted to authorized parties.
The choice of a public permissioned blockchain ensures the network operates in compliance with regulations while maintaining transparency and privacy. Every transaction on the public permissioned blockchain can be viewed by anyone, similar to public blockchains like Ethereum or Bitcoin.
On the other hand, private authorization minimizes the risks associated with interacting with anonymous parties that fail to meet regulatory standards, such as anti-money laundering rules, illicit goods trading, and terrorism financing.
To ensure security and compliance, Deutsche Bank will employ a curated list of transaction validators and provide exclusive access to regulators through special administrative rights. This approach allows the bank to maintain control over the blockchain network without compromising transparency and efficiency.
Project Dama 2 is also part of the global initiative “Project Guardian,” spearheaded by the Monetary Authority of Singapore (MAS). This program involves various financial institutions exploring blockchain-based asset management and tokenization. Previously, JPMorgan and Visa had taken similar steps under this initiative.
Deutsche Bank’s move reflects the growing interest of traditional financial institutions in blockchain technology. Project Dama 2 could serve as a bridge between the efficiency of blockchain technology and stringent regulatory requirements, facilitating blockchain adoption in the financial sector.