A Ukrainian startup has developed a platform that bridges traditional European banking infrastructure with blockchain technology, potentially unlocking access to a €3 trillion tokenized asset market by connecting more than 6,000 banks across the continent to digital payment systems. BlockControl, which secured second place at a global hackathon organized by Coinbase's Base network in early 2025, has since raised a $50,000 grant from Arbitrum DAO and signed its first partnership agreement with a Dubai-based financial company to deploy digital currency systems.
What to Know:
- BlockControl creates digital "twins" of traditional bank accounts on blockchain networks, enabling instant transactions at $0.01 per transfer compared to €1 for standard European payments and $25-45 for international wire transfers
- The platform operates as a technical provider rather than a financial institution, avoiding licensing requirements while processing 9,000 transactions per minute with 24/7 availability
- European regulators launched Markets in Crypto-Assets Regulation in January 2025, with the European Central Bank preparing to introduce a digital euro by 2028 to counter U.S. dollar-pegged stablecoins
The three-person team—Yuriy Kovalchuk, Dmytro Oliynyk and Igor Naumov—built the initial system during Base Batch, a hackathon that drew more than 5,000 developers from over 90 countries submitting 800 projects. The Ukrainian team's second-place finish earned them 0.5 ETH and support from Base's development network.
The team launched a working demonstration two months after the competition.
Regulatory Shift Creates Market Opening
Europe's new regulatory framework arrived at the start of 2025 with the implementation of Markets in Crypto-Assets Regulation, the world's first comprehensive legal structure for digital assets. The European Central Bank simultaneously began testing a digital euro, planned for full deployment in 2028.
"Stablecoins are reshaping global finance with the U.S. dollar at the forefront," Jürgen Schaaf, an ECB advisor, stated in recent guidance. "Without a strategic response, European monetary sovereignty and financial stability could be undermined."
Research from PwC Legal's German division in 2025 and a StateStreet survey from 2024 reveal significant infrastructure gaps blocking widespread adoption. The StateStreet study found 58 percent of respondents identified the gap between market readiness and actual technical capacity as the primary obstacle to deploying digital assets at scale.
McKinsey projects the European tokenized asset market could reach €3 trillion by 2028, but only if solutions emerge to overcome existing technical barriers.
Traditional SEPA payment systems, while still dominant across Europe, process transactions in one minute to one full business day with €1 fees and set cutoff times that limit availability. SWIFT international transfers require two to three business days at costs ranging from $25 to $45 per transaction.
BlockControl's system settles transactions in one second at $0.01 per transfer with no cutoff times, operating continuously every day of the year.
The platform maintains 9,000 transactions-per-minute processing capacity while integrating directly with existing banking infrastructure.
Technical Architecture Avoids Licensing Requirements
The platform functions by creating blockchain-based digital representations of traditional bank accounts. When a customer deposits 100 euros into a bank account, the institution can immediately issue 100 digital euros backed entirely by the physical deposit. These tokens can then be programmed, transferred instantly or distributed automatically while maintaining full bank control and regulatory compliance.
BlockControl does not hold customer funds or require specialized financial licenses.
The company provides software to banks rather than operating as a financial intermediary, eliminating years-long licensing processes that cost millions of dollars across multiple jurisdictions.
Other blockchain banking solutions typically require extensive regulatory approval in each country of operation.
The company spent months analyzing why most blockchain solutions fail in the banking sector. Banks resist systems that force operational changes. BlockControl adapts to existing banking processes rather than requiring institutions to restructure around new technology.
The platform's technical infrastructure includes an Application Programming Interface and Software Development Kit that enable financial institutions to integrate the system into their existing operations. The API allows platforms and applications to interact with external services, while the SDK provides guidelines and tools for developing BlockControl-specific applications.
Smart contracts support the implementation of products and services through self-executing agreements with predefined terms coded into the distributed ledger network. The platform also supports tokenization of financial assets, capital market deployment and programmable money features that enable predetermined logic controlling where and how payments can be made.
First Contracts and Development Timeline
BlockControl signed a Memorandum of Agreement with a Dubai financial company in June 2025. The partnership will deploy the platform for issuing digital versions of both United Arab Emirates dirhams and U.S. dollars. Initial implementation priorities include QR code-based retail payments designed to reduce merchant transaction fees from 2 percent to 0.2 percent with instant settlement, micropayments for public transportation systems, international transfers completing in seconds at costs below 1 percent, and programmable transactions enabling automated business processes.
The company is conducting parallel negotiations with a Lithuanian electronic money institution and preparing to sign a Letter of Intent to expand BlockControl's capabilities into the European market. Lithuania serves as a common jurisdiction for fintech companies seeking European Union access due to its established regulatory framework for digital financial services.
Arbitrum Grant Provides Development Funding
Arbitrum DAO, one of the largest Layer 2 networks built on Ethereum, awarded BlockControl a $50,000 grant in July 2025. The funding came after multiple voting rounds and community review by the decentralized autonomous organization, which carefully evaluates projects before allocating resources.
The grant operates on a milestone basis, with funds released as BlockControl achieves specified development targets. This structure enables expansion beyond traditional banking markets into decentralized finance ecosystems. Arbitrum's selection process included technical review, community discussion and governance voting before approving the allocation.
For BlockControl, the grant represents validation from the Web3 community and provides capital for scaling operations. The milestone-based disbursement ensures the company maintains development momentum while meeting predetermined technical objectives.
Market Positioning and Competition
BlockControl positions itself as infrastructure required by banks immediately rather than as a demonstration of blockchain capabilities. Payment solutions must be simple, secure, fast to integrate and compatible with existing regulations. The platform delivers these requirements without forcing banks to alter core operations.
The next 18 months will determine whether BlockControl can establish itself as part of Europe's evolving financial infrastructure.
The company aims to be among the first to implement this technological approach at scale across multiple markets. The team continues to focus on technical resilience testing, market-specific adaptations and expansion into new jurisdictions as regulatory frameworks solidify.
European banking systems face pressure to modernize payment infrastructure as digital currencies gain traction globally and regulatory frameworks create clear operating parameters for blockchain technology in financial services. BlockControl's technology provides banks with tools to participate in this transition while maintaining existing operational frameworks and regulatory compliance standards.
Final Thoughts
BlockControl's platform addresses a critical gap in European financial infrastructure by enabling banks to issue and manage digital currencies without extensive operational restructuring or multi-year licensing processes. The company's early partnerships in Dubai and Lithuania, combined with backing from Arbitrum DAO, position it to capitalize on Europe's €3 trillion projected tokenized asset market as regulatory frameworks mature and banks seek compliant blockchain integration solutions. The startup's success will depend on its ability to scale operations while maintaining technical reliability and meeting regulatory requirements across multiple jurisdictions during the 18-month period when European digital currency systems move from testing to full deployment.