The original announcement is on UBS's site.
Why permissioned networks require additional controls for regulated institutions
Ethereum provides access to onchain liquidity, applications, assets, and market infrastructure that do not exist in the same form on permissioned networks.
For regulated institutions, access to a public network also introduces additional control requirements. Institutions need to govern which transactions they submit, how those transactions are processed, and how activity is recorded and evidenced.
UBS and Nethermind completed two proofs of concept that address this directly. Both placed the controls in the infrastructure the institution operates rather than in the network.
Compliance at the node
The first proof of concept configured a Nethermind Client node to apply customizable compliance and risk rules: restricting transactions to pre-approved addresses and blocking interactions with specified smart contracts. The checks ran before a transaction was broadcast.
The institution operates this layer, configures it to its own policies, and can evidence it to a supervisor.
Control over inclusion
The second proof of concept routed bundles of approved transactions through relay services directly to selected builders, supporting reliable inclusion under the tested conditions.
The two controls cover different points in the transaction lifecycle: node-level rules govern what an institution submits, and transaction routing governs how an approved transaction is propagated toward inclusion. Each ran independently, and both ran together.
What was tested
The tests validated that the two control mechanisms could operate together end to end, with approved transactions consistently processed and recorded on Sepolia Testnet without changes to the Ethereum protocol. Neither PoC involved live transactions.
The result
An institution can run its own infrastructure, apply its own rules at submission, and apply controls over how approved transactions are routed toward the chain, with no change to the Ethereum protocol. The approach preserves compatibility with Ethereum and the wider Ethereum ecosystem while keeping the controls at the institution’s infrastructure layer.
Both proofs of concept ran on Nethermind Client, the Ethereum execution client we build and maintain, which runs a substantial share of the network's execution layer.
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."
Andreas Kubli, Group Head of Digital Assets at UBS, said: "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."
What comes next
The proofs of concept provide a foundation for further development and evaluation. The next questions are how these controls perform under production conditions, how they integrate with institutional governance and evidencing requirements, and how the model can extend across additional onchain workflows.
For institutions working through the broader question of how to assess a public network against the standards they already answer to, our report on Ethereum's operational resilience sets out a framework for exactly that.
Institutional teams weighing a deployment on Ethereum can start that conversation with us.
