Aave, one of the largest decentralized lending protocols, could see its net deposits soar to $100 billion before the end of this year, according to the platform’s founder, Stani Kulechov.

In an Aug. 10 post on X, Kulechov explained that the DeFi protocol’s current growth rate could push it to that figure sooner than expected.

Antonio Garcia-Martinez, Director of Base Ads at Coinbase, claimed that the $100 billion scale would place Aave among the 35 largest banks in the world and on par with Deutsche Bank.

Notably, US Federal Reserve statistics back the comparison, ranking Aave’s deposit volume 41st among US-chartered commercial banks. That puts the DeFi giant ahead of established traditional financial institutional names like Barclays.

These bullish positions are unsurprising considering Aave has experienced a strong upward trajectory this year.

In July, the protocol surpassed $50 billion in net deposits for the first time, and it has since added another $11 billion, bringing its total to $61.1 billion as of press time.

Data from Token Terminal shows that this gives Aave a commanding 66.7% share of the $91.7 billion DeFi lending market. By comparison, the next largest competitor, Morpho, holds just $7.7 billion in deposits, making Aave nearly eight times larger.

What is driving Aave’s growth?

Aave’s remarkable growth is a product of its DeFi roots and reflects increasing interest from traditional finance and fintech companies.

A prime example is the recent disclosure by an Ethereum-focused treasury company, the Nasdaq-listed Blockchain Technology Consensus Solutions (BTCS), that it uses Aave to generate yield and bolster its ETH holdings.

Aave’s growth can also be linked to Ethena’s USDe stablecoin, which has seen significant deposits into the lending protocol.

According to Dune Analytics data, $6.4 billion of Ethena’s assets are parked on Aave, which has increased rapidly in just 10 days.

However, USDe’s expanding exposure to Aave poses some risks to the DeFi protocol’s growing footprint.

Risk management firm Chaos Labs recently cautioned that USDe’s growing presence could trigger liquidity pressures. The firm pointed to extensive rehypothecation, where collateral is reused across transactions, warning that systemic leverage could amplify market risks.

Mentioned in this article

Deutsche Bank, Memento Blockchain, and Interop Labs published a litepaper on June 17 outlining plans for Digital Asset Management Access 2 (DAMA 2), a tokenization platform intended to operate on public blockchains and facilitate the issuance of regulated funds.

According to the paper, DAMA 2 would link three layers: Ethereum (ETH) would act as the settlement base, Memento Blockchain’s ZKsync-based layer-2 would process transactions with zero-knowledge privacy safeguards, and a top-layer interface would offer an app store with ready-made fund smart contract templates.

The concept is framed as Blockchain-as-a-Service, allowing issuers to launch products without the need to build protocol teams.

To support cross-chain activity, DAMA 2 would integrate Axelar Network’s Interchain Token Service, enabling interoperability with more than 70 blockchains. This multichain setup would give issuers a single dashboard to lock, mint, and burn tokens across networks while preserving fungibility.

The litepaper confirms Deutsche Bank’s earlier initiative, first reported on Dec. 17 last year, to address regulatory barriers tied to public blockchains, using ZKsync technology to cut costs and boost efficiency.

The partners expect to deliver a minimum viable product in the second half of 2025, though no specific launch date has been given.

Regulatory alignment and rollout

Boon-Hiong Chan, Deutsche Bank’s innovation lead for securities and technology advocacy, said the project demonstrates how public blockchains have matured for institutional finance and how applied technologies can achieve resilience and compliance through a single platform. He added that familiar workflows and low learning curves remain essential for adoption.

The litepaper describes modular compliance tools, on-chain investor registries, and expense management features. Privacy would be managed through allowlisted wallets and private RPC endpoints, while Axelar’s hub-and-spoke model could isolate compromised chains if necessary.

Axelar co-founder Sergey Gorbunov called DAMA 2 a compliant pathway for institutions to enter the digital assets space and scale securely across multiple blockchains, noting that vendor fragmentation and isolated liquidity remain industry challenges.

Settlement finality would tie back to Ethereum proofs, and legal agreements would define clear transfer points on layer-2 networks.

Nicola Lanteri, CEO of Memento Blockchain, said the planned Memento ZK Chain would combine a permissioned sequencer with zero-knowledge proofs to give institutions predictable control while preserving the openness of public blockchain networks.

The litepaper projects that asset managers could tap into an estimated $84 trillion intergenerational wealth transfer by 2045, citing Cerulli Associates, and positions DAMA 2 as a way to reach digital-native investors.

Mentioned in this article

Several technology companies have joined Nillion’s newly launched Enterprise Cluster — an initiative aimed at extending decentralized applications beyond cryptocurrencies into privacy-focused use cases such as healthcare, financial management and enterprise data sharing.

As part of the partnership, Deutsche Telekom, Alibaba Cloud, STC Bahrain and Pairpoint by Vodafone are operating infrastructure nodes on Nillion’s decentralized compute platform, the company announced Thursday.

The Enterprise Cluster enables organizations to run privacy-critical applications on decentralized infrastructure, helping to minimize the trade-offs between the risks of centralized systems and the limitations of blockchain-based privacy.

“For the first time, organizations can compute on encrypted data across decentralized clusters, without sacrificing privacy,” Nillion’s co-founder and chief scientist, Miguel de Vega, told Cointelegraph. “It’s proof that privacy-first computation is now enterprise-ready infrastructure.”

Nillion is a decentralized network focused on secure data storage and computation. Its core technology, Nil Message Compute, enables encrypted data to be processed without decryption.

As previously reported by Cointelegraph, Nillion raised $25 million in October, bringing its total funding to $50 million.

Before the fundraise, Nillion’s technology was integrated with the Aptos network to support privacy-focused applications.

Related: Ethereum privacy roadmap proposes EU GDPR-safe blockchain design

Blockchain privacy has never left the spotlight

Nillion’s technology aims to address what it describes as a “longstanding dilemma” — the inherent privacy limitations of blockchain systems.

These limitations have faced heightened scrutiny in 2025, as global crypto regulations increasingly target privacy tools, including mixers, zero-knowledge proofs, stealth addresses and self-custodied wallets.

As Cointelegraph noted, the debate over privacy in blockchain is far from settled. Emerging technologies continue to challenge the notion that anonymity should automatically be viewed as a criminal threat.

Traditionally, protecting sensitive data on the blockchain has relied on keeping it entirely offchain or encrypting it onchain. However, as Midnight CEO Eran Barak warned, onchain encryption does not “provide durable privacy” in light of the rapid advances in quantum computing.

Despite the public debate, several privacy-focused projects continue to gain traction, particularly in the areas of zero-knowledge proofs and decentralized identity.

Related: Crypto projects prepare to battle for privacy in Switzerland

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Crypto Journalist

Amin Ayan

Crypto Journalist

Amin Ayan

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Amin Ayan is a crypto journalist with over four years of experience in the industry. He has contributed to leading publications such as Cryptonews, Investing.com, 99Bitcoins, and 24/7 Wall St. He has…

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June 7, 2025

Deutsche Bank is stepping deeper into the digital assets space, as Europe’s largest lender explores stablecoins and tokenized deposit solutions to modernize payments.

The bank is weighing whether to issue its own stablecoin or participate in a broader industry initiative, Sabih Behzad, Deutsche Bank’s head of digital assets and currencies transformation, said in an interview with Bloomberg.

It is also assessing the potential for developing tokenized deposits that could streamline transaction settlements.

Stablecoins Gain Traction as Alternative Payment Method

Stablecoins, which are pegged to fiat currencies such as the euro or dollar, along with tokenized deposits — blockchain-based representations of traditional bank deposits — are gaining traction as banks explore faster, cheaper payment methods.

While such technologies have been under development for years, tangible large-scale use cases remain limited.

“We can certainly see the momentum of stablecoins along with a regulatory supportive environment, especially in the US,” Behzad noted.

“Banks have a wide variety of options available — everything from acting as a reserve manager to issuing their own stablecoin, either alone or in a consortium.”

Regulatory clarity is helping to accelerate interest. With EU-wide frameworks in place and stablecoin legislation moving through the US Congress, banks are increasingly confident about entering the sector.

Deutsche Bank is not alone. Spanish lender Banco Santander recently began early-stage work on a stablecoin and plans to offer crypto services through its digital banking arm.

Deutsche Bank’s asset management arm DWS Group, together with Flow Traders and Galaxy Digital, has also launched a joint venture to issue a euro-denominated token.

“I do see a role for a European stablecoin, or European banks working on a stablecoin, especially for settlement purposes in a digital world,” ING CEO Steven van Rijswijk said this week.

In parallel, JPMorgan’s Kinexys network — which supports blockchain-based payments — now processes more than $2 billion daily, though that still represents a small slice of JPMorgan’s $10 trillion in daily payment flows.

Deutsche Bank Deepens Push into Crypto

Deutsche Bank has been gradually building its digital assets capabilities.

Last year, it invested in Partior, a blockchain-based cross-border payments platform.

It also partnered with Swiss blockchain firm Taurus in 2023 to offer digital asset custody services to institutional clients.

Additionally, the bank is participating in Project Agorá, an initiative led by the Bank for International Settlements and several central banks aimed at exploring tokenization’s role in wholesale cross-border payments.

As reported, Citigroup has projected a dramatic rise in the stablecoin market, forecasting that its total market capitalization could soar from nearly $240 billion today to over $2 trillion by 2030.

The prediction says the growth in adoption would be driven by regulatory developments and increased interest from both financial institutions and the public sector.