Hassan Maishera
TL;DR
-
The Cardano Foundation says CIP-0113 is live following independent security audits.
-
The standard lets issuers control who can receive tokens and freeze or seize holdings under specified rules.
-
Transfer restrictions can support identity checks, sanctions screening, and requirements for regulated assets.
-
The foundation also announced recognition under a Swiss certification framework, while ADA fell 4.5% amid a broader market decline.
The Cardano Foundation has launched a token standard designed to help issuers bring regulated stablecoins, funds, and bonds onto the blockchain.
Announced Wednesday, the standard allows issuers to determine who can receive their assets and establish powers to freeze or seize holdings when required.
Known as Cardano Improvement Proposal CIP-0113, the standard is live on the network following independent security audits, according to the foundation.
Transfer Rules Follow Tokens Across Wallets
Many crypto tokens can move freely between wallets. Regulated financial products often require restrictions on ownership and transfers, including identity verification and sanctions checks.
CIP-0113 embeds those controls into how assets move, allowing the network to check an issuer’s rules before accepting a transfer.
A fund restricted to verified investors could reject transfers to wallets whose owners have not completed identity checks. A stablecoin issuer could prevent its tokens from reaching sanctioned addresses.
Those restrictions continue to apply when holders use different wallets or services, helping issuers maintain controls beyond the initial distribution of an asset.
Frederik Gregaard, chief executive of the Cardano Foundation, told CoinDesk that an asset’s rules must accompany it and be enforced whenever it moves.
The standard keeps tokens in a shared smart contract that governs their movement. Computers validating transactions enforce the selected rules before approving transfers.
The design uses capabilities already available on Cardano, so its introduction required no hard fork or change to the network’s underlying rules.
Issuers can choose existing rule sets or create their own. They can also update those rules as regulatory requirements change.
The foundation named Eternl, GeroWallet, CardanoScan, and BloxBean among the wallets, infrastructure services, and developer tools supporting the launch.
Issuer Powers Carry Implications for Holders and Lenders
The standard’s controls can extend beyond preventing transfers. Depending on a token’s rules, an authorized party may be able to freeze holdings or move tokens without the holder’s consent.
Those powers can support compliance with regulatory or court orders, but they also affect the rights and risks associated with holding the asset.
The technical specification advises lending services to examine these permissions before accepting a token as collateral. A token that can be seized or transferred by an authorized party presents considerations beyond its market value.
The extent of those powers will depend on the rules selected for each asset. Cardano’s launch adds to existing approaches for regulated assets across major blockchains.
Ethereum supports permissioned token standards such as ERC-3643. Solana offers transfer controls through token extensions, while the XRP Ledger supports issuer restrictions and balance clawbacks.
The Cardano Foundation also announced recognition under the certification framework of the Capital Markets and Technology Association, a Swiss industry body whose standards are used for issuing tokenized shares.
The developments expand Cardano’s tools for regulated onchain assets. Meanwhile, ADA declined 5.7% over the past 24 hours alongside a broader cryptocurrency market drop.
