Deutsche Bank, a global banking leader, is expanding its presence in the blockchain space by building a layer-2 rollup network on Ethereum, leveraging ZKsync technology developed by Matter Labs. According to a report by Bloomberg and confirmed by a Matter Labs representative, the project aims to create a 'public and permissioned' L2 network.
This setup allows anyone to view network activities but restricts participation to authorized entities. The project's development is a testament to the renewed institutional interest in blockchain technology, particularly as cryptocurrency prices reach new heights. By establishing a layer-2 network on Ethereum, Deutsche Bank seeks to address regulatory compliance issues associated with public blockchains in finance, which require institutions to know their counterparts - a challenge in fully open networks like the main Ethereum chain. The ZKsync-based rollup is expected to improve transaction speed and compliance.
Furthermore, it could enable banks to experiment with blockchains, selecting validators, and potentially grant regulators 'super admin rights' to monitor fund movements more closely. The L2 blockchain is currently in a test environment, built using ZK Stack, a customizable toolkit for developing blockchains based on ZKsync technology. This initiative is part of Deutsche Bank's multi-chain project, Dama 2, which is itself part of the Singapore Monetary Authority's Project Guardian, a collaborative effort among 24 major financial institutions exploring blockchain applications for asset tokenization.