UBS and Nethermind Prove Ethereum Can Meet Institutional Compliance Needs

UBS and Nethermind have completed two joint proofs of concept (PoC) demonstrating that the public Ethereum network can support the operational and compliance needs of regulated financial institutions. This collaboration is an important step toward making Ethereum infrastructure more accessible to heavily regulated financial organizations.

The PoCs showed that banks can apply strong compliance checks through systems they run on top of Ethereum without changing how Ethereum itself works. This approach keeps the network open and neutral, ensuring the solution remains compatible with the wider Ethereum ecosystem while meeting necessary compliance requirements.

UBS and Nethermind collaborated on two specific PoCs to enforce compliance at critical stages of Ethereum transaction broadcasting. They configured an Ethereum node to apply customizable compliance and risk rules, including restricting transactions to pre-approved addresses and blocking certain smart contract interactions.

The second PoC 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 compliant transactions were consistently processed and recorded.