This paper presents the design and implementation of a digital control system for modular multilevel converters (MMC) and its use in a 5 kW small-scale prototype. To achieve higher system control reliability and multi-functionality, the proposed architecture has been built with an effective split of the control tasks between a master controller and six slave controllers, one for each of the six arms of the converter. The MMC prototype has been used for testing both converter and system-level controls in a reduced-scale laboratory set up of a Multi-Terminal DC transmission network (MTDC). The whole control has been tested to validate the proposed control strategies. The tests performed at system level allowed exploration of the advantages of using an MMC in a MTDC system.