UBS, $165B Banking Giant, Tests Ethereum Infra With Nethermind

In a major institutional crypto update, Swiss banking giant UBS has revealed partnered with blockchain infrastructure firm Nethermind to test Ethereum-based applications.

The collaboration aimed to check whether Ethereum can meet the compliance requirements of institutional finance.

The collaboration resulted in two proof-of-concept projects that explored how regulated financial institutions could interact with the public Ethereum blockchain. The main aim of the test were to check the functioning of ethereum infra under compliance controls.

UBS says the work was meant to show that banks can apply compliance controls through systems built on top of Ethereum without changing Ethereum itself.

UBS and Nethermind have completed two joint proofs of concept showing that a public, permissionless network can support the compliance and operational needs of regulated financial institutions.

The PoCs show that banks and asset managers can apply strong compliance controls… pic.twitter.com/uJuDGPupGn

— Nethermind (@Nethermind) June 23, 2026

UBS Nethermind Test Ethereum Infra

Founded in 2017 by Ethereum developer Tomasz Kajetan Stańczak, Nethermind is one of the leading blockchain infrastructure firms behind the Ethereum ecosystem. It develops software that powers a significant share of the network’s nodes.

And now the infra firm is helping the leading Swiss banking giant UBS in testing ethereum infrastructure.

According to the official blog, the first proof of concept centered on creating a compliance-aware Ethereum node. The system was designed to allow institutions to implement custom compliance rules without modifying Ethereum itself. These controls could restrict interactions to approved wallet addresses and limit engagement with specific smart contracts when necessary.

The second proof of concept focused on transaction execution. UBS and Nethermind tested a transaction-routing framework that directs approved transaction bundles through relay services and selected block builders. The approach aims to improve transaction inclusion while ensuring compliance standards are maintained throughout the process.

The release says both tests were run on Sepolia, and neither involved live transactions. Both experiments were conducted on Ethereum’s Sepolia test network and did not involve client assets.

What was the Outcome of UBS Ethereum Test

UBS framed the tests as part of its broader digital assets strategy. The tests address a key challenge facing banks and other regulated financial institutions exploring public blockchain networks. While Ethereum offers access to a large ecosystem of applications, liquidity, and developers, institutions have traditionally struggled with compliance concerns tied to permissionless infrastructure.

UBS said the project demonstrates that regulatory requirements can potentially be enforced at the infrastructure layer rather than requiring modifications to Ethereum’s core protocol. This could enable financial institutions to access public blockchain networks while remaining compliant with internal governance and regulatory obligations.

The move comes as major financial institutions increasingly explore tokenization, a process that converts traditional financial assets into blockchain-based representations. Tokenized assets have become one of the fastest-growing segments of the digital asset industry, attracting interest from banks, asset managers, and financial market infrastructure providers.

UBS has been among the more active traditional financial institutions in the space. Over the past several years, the bank has participated in multiple tokenization initiatives involving digital bonds, structured products, and blockchain-based settlement systems.

In late 2024, UBS Asset Management launched a tokenized money market fund on Ethereum, underscoring the bank’s growing confidence in public blockchain infrastructure.