Deutsche Bank Ethereum initiative is taking shape as the German banking giant develops an Ethereum-based Layer 2 platform using ZKsync technology. The project, called DAMA 2, aims to meet regulatory requirements while advancing blockchain adoption in traditional finance.
The effort is part of Project Guardian, a digital asset initiative led by the Monetary Authority of Singapore, alongside major institutions including JPMorgan Chase and DBS Group. Deutsche Bank plans to launch a minimum viable product of DAMA 2 as early as next year, pending regulatory approval.
At its core, DAMA 2 leverages Ethereum’s trust layer with ZKsync rollups to provide scalability, privacy, and compliance. Unlike open public blockchains, DAMA 2 introduces a controlled network with vetted validators and built-in regulatory monitoring tools.
“Deutsche Bank’s entry into Ethereum Layer 2 technology signals a new phase in institutional adoption—one where compliance and decentralization can coexist,” said a blockchain researcher at the Frankfurt School of Finance.
The bank has also integrated tools such as Memento’s ZKchain and Axelar’s cross-chain interoperability, expanding DAMA 2’s capacity to manage assets across multiple blockchains. This interoperability is seen as critical for scaling institutional-grade DeFi applications.
For regulators, DAMA 2 offers advanced monitoring features including automated compliance checks, suspicious activity flagging, and anti-money laundering (AML) controls. Such features address concerns about using public blockchains in highly regulated environments.
According to CoinDesk, Deutsche Bank’s move mirrors a broader trend of global banks exploring blockchain infrastructure. With Ethereum Layer 2 solutions supporting more than $120 billion in stablecoin circulation, the financial stakes are significant.
If approved, DAMA 2’s rollout could pave the way for more banks to embrace blockchain as a compliant backbone for global finance. By marrying Ethereum’s Layer 2 scalability with institutional oversight, Deutsche Bank is positioning itself at the frontier of regulated digital assets.
