UBS and Nethermind complete compliance proofs of concept on Ethereum

UBS and Nethermind announced they have completed two joint proofs of concept (PoC) showing that the public Ethereum network can support the operational and compliance needs of regulated financial institutions. „This is a novel initiative that demonstrates an important step forward in making Ethereum infrastructure easier for heavily regulated financial institutions to use.” – according to the press release.

UBS and Nethermind have successfully completed two joint proofs of concept demonstrating that the public Ethereum network can support the operational and compliance requirements of regulated financial institutions.

„This represents an important step toward making Ethereum infrastructure more accessible to heavily regulated financial organizations. The tests showed that banks can apply strong compliance checks through the systems they run on top of Ethereum, without changing how Ethereum itself works. This approach keeps the network open and neutral, and ensures the solution remains compatible with the wider Ethereum ecosystem, while meeting the necessary compliance requirements of larger financial institutions – taking us a step closer to bridging the gap between public networks and institutional-grade infrastructure.” – the bank said.

Specifically, UBS and Nethermind collaborated on proofs of concept to enforce compliance at two critical stages of Ethereum transaction broadcasting. First, they configured an Ethereum node to apply customizable compliance and risk rules – such as restricting transactions to pre-approved addresses and blocking certain smart contract interactions. Second, they developed a component that routes bundles of approved transactions through relay services directly to select builders, ensuring reliable inclusion on the blockchain. This end-to-end process was successfully tested on the Sepolia test network, confirming that compliant transactions were consistently processed and recorded. Neither PoC involved live transactions.

„Overall, the work shows that a bank can run its own infrastructure with compliance controls in place when transactions are submitted, as well as how and by which counterparties they are processed – without changing the public Ethereum protocol.” – the bank explained.

UBS and Nethermind plan to build on this work as the technology and regulatory environment continue to develop. Such collaborations show that a new technology and growing innovation in the digital assets space can bring material benefits to effective risk management and compliance with strict regulatory expectations, even on decentralized, public networks.

Andreas Kubli, Group Head of Digital Assets at UBS, said: “At UBS, we are building the core infrastructure to support tokenized assets and digital assets, always guided by a client-led and responsible approach. These proofs of concept demonstrate the value of close collaboration between UBS and Nethermind in shaping the next generation of compliant blockchain infrastructure. Together, we co-designed the approach, aligned on technical and governance requirements, and validated solutions end-to-end. The results show that institutional-grade controls and public-network interoperability can be achieved without compromising Ethereum’s openness or neutrality. We value Nethermind’s technical expertise and will continue to build on this work as the ecosystem evolves.”

Tomasz Kurowski, Head of Enterprise Business at Nethermind, said: “These two proofs of concept reflect Nethermind’s institutional strategy of delivering enterprise-grade Ethereum infrastructure, built on deep protocol and client expertise. By implementing compliance controls at the infrastructure layer, we have shown that institutional requirements can be met without compromising Ethereum’s openness or interoperability. UBS has been a great partner throughout this work, pragmatic, thoughtful, and clearly at the forefront of institutional digital asset adoption. These results provide a strong foundation for further joint development and broader partnership.”

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UBS is a leading and truly global wealth manager and the leading universal bank in Switzerland. It also provides diversified asset management solutions and focused investment banking capabilities. UBS manages 6.9 trillion dollars of invested assets as per the first quarter 2026. UBS helps clients achieve their financial goals through personalized advice, solutions and products. Headquartered in Zurich, Switzerland, the firm is operating in more than 50 markets around the globe. UBS Group shares are listed on the SIX Swiss Exchange and the New York Stock Exchange (NYSE).

Nethermind is a blockchain research and engineering company and a core contributor to the Ethereum ecosystem. The company develops the Nethermind Ethereum client, one of the primary execution clients powering the network, and brings deep protocol engineering expertise into institutional blockchain infrastructure. Alongside its open-source work, Nethermind supports enterprises and financial institutions in designing and deploying resilient, compliance-aware blockchain infrastructure aligned with operational and governance requirements of regulated markets.