Inner control of a Modular Multilevel Converter (M2C) based on direct tolerance-band modulation of the arm currents has been studied. This approach is attractive because it allows low switching frequency, directly provides the desired arm-current waveform and enables fast protective actions at the same time as the complexity of the over-all control system is reduced. Issues related to common-mode voltage are discussed and supporting PSCAD simulations are presented together with some results from experiments with a reduced-power prototype converter.