Deutsche Bank AG addresses the regulatory challenges banks face when using public blockchains, such as the risk of unknowingly transacting with criminals or sanctioned groups.
According to a Bloomberg report, the bank launched its test version of Project Dama 2, an asset management pilot, in November. This platform’s layer two system relies on public blockchains to provide a more affordable and efficient transaction.
Boon-Hiong Chan, innovation leader at Deutsche Bank Asia-Pacific, said the bank’s Layer 2 connects to Ethereum, one of the blockchain’s busiest networks.
Deutsche Bank sees blockchain as a means to cope with margin pressure in financial services
Chan explained that public blockchains like Ethereum pose risks for regulated banks. The risks include uncertainty about who performs the validation of transactions, the ability to pay fees to sanctioned entities, and the possibility of unexpected changes to the blockchain.
Chan added: “With the help of two chains, some of these regulatory concerns should be met.”
Project Dama 2 is one of many initiatives in Singapore’s Project Guardian, where 24 major financial institutions want to tokenize assets via blockchain. Deutsche Bank, among others, sees blockchain as a means to cope with margin pressure in financial services. But there are still questions about how far banks should go in the crypto world.
Credit : cryptonews.net
