The Cardano Foundation has launched CIP-0113, a token standard that lets issuers of regulated assets control transfers and authorize freezes or seizures under rules attached to their tokens.
Announced on Oct. 7, the framework targets stablecoins, tokenized funds and bonds. It allows issuers to require identity checks, block sanctioned addresses and limit who can receive assets. These controls apply to tokens issued through the framework, rather than ADA or every existing Cardano token.
CIP-0113 lets issuers select controls that match the requirements of their assets. For example, a fund restricted to verified investors can reject transfers to recipients who have not completed identity checks.
Similarly, a stablecoin issuer can prevent transfers involving addresses on a sanctions list. The chosen rules remain attached to the asset when holders move it between supported wallets or services.
Issuers can also use modules that pause transfers or allow authorized operators to move holdings without the owner's approval. Such powers depend on the rules selected for each token.
The Foundation's reference implementation includes identity checks, sanctions restrictions, forced transfers and seizures. Issuers can divide administrative permissions among several operators instead of assigning every power to one account.
“The rules have to travel with the asset and be enforced every time it moves,” Cardano Foundation chief executive Frederik Gregaard said.
The technical specification also advises lending services to examine issuer powers before accepting programmable tokens as collateral. An authorized seizure or transfer can affect assets held within a lending arrangement.
The standard uses existing Cardano features and requires no hard fork, which would change the network's underlying rules. Assets issued through the framework remain native Cardano tokens.
A shared smart contract controls their movement. Before accepting a transaction, the network checks whether it satisfies the relevant transfer rules. This adds checks to ownership changes that ordinary native tokens can make without those restrictions.
Issuers can choose existing rule modules or develop their own. They can also update those modules as requirements change, without replacing the underlying CIP-0113 framework.
The Foundation named Eternl, GeroWallet, CardanoScan and BloxBean among the wallets, explorer and developer tools supporting the launch. Its September ecosystem update reported completed integrations with CardanoScan, Eternl and GeroWallet.
The proposal dates to January 2023 and underwent several revisions. GitHub records show that developers merged the final proposal on Sept. 29 after 90 commits and technical review.
The Foundation said the mainnet release followed independent security audits. Its implementation repository states that developers fixed audit findings or accepted them as remaining design limitations.
In July, the Foundation reported that developers had addressed vulnerabilities found during an audit. Its September update said the first programmable token module completed an audit with “no critical or high-severity findings.”
A separate reference implementation based on the Swiss Capital Markets and Technology Association framework has a different audit status. Its repository lists a formal independent audit of that codebase as planned.
The Foundation also announced CMTA recognition of CIP-0113 Programmable Asset Tokens as a smart contract equivalent to its CMTAT framework for certification purposes.
CMTA's framework covers financial instruments represented by blockchain tokens, including company shares, debt securities and structured products issued and managed under its technical standards.
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