The German loan giant, Deutsche Bank AG Inc. Databasedeveloped a Ethereum ETH/USD Layer 2 blockchain, according to a report released Wednesday, the latest in a wave of growing interest in Web3 from traditional financial giants.
What happened: The solution was developed using ZKsync technology and was part of the Project Dama 2 experiment, unveiled in November, Bloomberg reported.
The Layer 2 concept was intended to avoid issues that regulated banks can encounter when working with public blockchains, such as transactions with criminals and sanctioned entities, according to bank executives cited by Bloomberg.
A rollup, or Layer 2 scaling solution, provides chain and Layer 1 infrastructure security while meeting the security and compliance needs of the business. They allow for complete customization, with only authorized entities allowed to act as validators, i.e. participants who verify transactions.
Deutsche Bank did not immediately respond to Benzinga’s request to confirm the development.
See also: MicroStrategy’s aggressive Bitcoin strategy raises eyebrows in the crypto community
Why it matters: The Dama 2 project was part of the broader “Project Guardian” initiative, launched by Singapore’s central bank, the Monetary Authority of Singapore, to test the application of asset tokenization and decentralized finance in a broader range of use cases in the financial sector.
Participating financial institutions include names like JPMorgan, who previously conducted a cross-border transaction on a public chain.
The move follows similar moves by other major companies. Earlier in August, a multinational conglomerate Sony Group unveiled its Ethereum Layer-2 blockchain, Soneium. The public blockchain, developed in collaboration with Web3 infrastructure, Startale Labs, hosts a range of Web3 games, NFT marketplaces and entertainment-related services.
Deutsche Bank is the largest lender in Germany, with assets worth 1.31 trillion euros ($1.36 billion) as of March 31, according to S&P Global.
Price Action: Shares of Deutsche Bank closed 2.44% lower at $17.18 during Wednesday’s regular session and were down 1.05% after-market, according to Benzinga Pro data.
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