UBS and Nethermind show Ethereum can meet compliance

UBS and Nethermind proved banks can enforce compliance on public Ethereum using node-level rules and transaction routing, tested on Sepolia with no live transactions.

UBS and Nethermind have successfully completed two proofs of concept, demonstrating that regulated financial institutions can implement compliance and operational controls on public Ethereum infrastructure without modifying the underlying protocol. The projects, tested on the Sepolia testnet with no live transactions, focused on configuring Ethereum nodes to enforce customizable compliance rules. These included restricting transactions to approved addresses and blocking certain smart contract interactions. Additionally, a routing component was developed to send approved transaction bundles directly to selected block builders. These solutions enable banks and asset managers to maintain compliance and risk management standards through their own infrastructure, while preserving Ethereum’s openness and compatibility with the broader ecosystem. This marks a significant step toward making public blockchain technology more accessible to the traditional financial sector.