UBS and Nethermind completes PoCs showing Ethereum can support operational and compliance needs of financial institutions

UBS and Nethermind completes PoCs showing Ethereum can support operational and compliance needs of regulated financial institutions.

UBS and Nethermind collaborated on proofs of concept to enforce compliance at two critical stages of Ethereum transaction broadcasting:

1️⃣ Compliance and risk rules – such as restricting transactions to pre-approved addresses and blocking certain smart contract interactions - were applied at the infrastructure level via node customization.

2️⃣ Approved transactions were bundled and sent through relay services directly to select builders, ensuring reliable inclusion on the blockchain.

➡️ Why this matters

One of the biggest barriers to institutional adoption of public blockchains has been the inability to control the operating environment.

Financial institutions must satisfy strict requirements around compliance, risk management, transaction monitoring, privacy, and operational oversight. Public blockchain infrastructure has traditionally offered limited control over how transactions are validated, propagated, and exposed to the wider network.

These proofs of concept demonstrate that compliance controls can be embedded directly into blockchain infrastructure without sacrificing interoperability with public Ethereum.

By implementing policy enforcement at the node level and introducing greater control over transaction broadcasting, UBS and Nethermind showed how regulated institutions could achieve greater operational certainty while continuing to benefit from the liquidity, network effects, and composability of public blockchains.

As more real-world assets move onchain, infrastructure models that bridge public blockchain accessibility with institutional compliance requirements are likely to become increasingly important.

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