UBS, Nethermind Successfully Conclude Compliance Proof of Concept on Ethereum
June 24, 2026
UBS and Nethermind recently announced the successful completion of two joint proofs of concept, marking a significant milestone in demonstrating that the public Ethereum network is capable of meeting the operational and compliance needs of regulated financial institutions. The collaboration between the two firms aimed to showcase how banks can leverage the Ethereum infrastructure to enforce compliance checks without altering the underlying protocol.
In their statement, UBS and Nethermind highlighted the importance of these PoCs in making Ethereum infrastructure more accessible to heavily regulated financial organizations. The tests conducted by the firms revealed that it is possible for banks to implement robust compliance measures while operating on top of the Ethereum network, thus enabling the application of strong compliance checks without disrupting Ethereum’s functionality.
By configuring an Ethereum node to enforce custom compliance and risk rules, such as limiting transactions to pre-approved addresses and blocking specific smart contract interactions, the firms demonstrated their ability to ensure compliance at critical stages of transaction broadcasting. Additionally, they developed a component that facilitates the routing of bundles of approved transactions through relay services to selected builders, ensuring their reliable inclusion on the blockchain.
The PoCs were conducted on the Sepolia test network, verifying that compliant transactions were consistently processed and recorded. Although live transactions were not involved in the tests, the successful execution of the end-to-end process validated the feasibility of implementing compliance controls within a bank’s infrastructure while seamlessly interacting with Ethereum.
Overall, the collaborative effort between UBS and Nethermind exemplifies how financial institutions can maintain compliance controls when submitting and processing transactions without compromising the core principles of the public Ethereum protocol. The firms expressed their intentions to further enhance this work as technology and regulatory frameworks evolve, emphasizing the potential benefits of innovation in the digital assets space for risk management and regulatory compliance.
Andreas Kubli, Group Head of Digital Assets at UBS, commended the value of the collaboration with Nethermind in shaping the next generation of compliant blockchain infrastructure. He emphasized the importance of aligning on technical and governance requirements to achieve institutional-grade controls while preserving Ethereum’s openness and neutrality. Similarly, Tomasz Kurowski, Head of Enterprise Business at Nethermind, highlighted the successful implementation of compliance controls at the infrastructure layer and emphasized UBS’s leadership in institutional digital asset adoption.
In conclusion, the UBS and Nethermind collaboration showcases the viability of integrating compliance controls within blockchain infrastructure, paving the way for enhanced risk management and regulatory compliance in decentralized, public networks like Ethereum. As the ecosystem continues to evolve, the two firms are committed to building on this work and fostering broader partnerships in the digital assets space.
