Cardano Introduces Token Standard for Regulated Digital Asset Controls

The Cardano Foundation has introduced a new token standard, CIP-0113, designed to enhance transfer controls for regulated digital assets. This standard allows issuers of stablecoins, funds, and bonds to embed identity checks, sanctions screening, and asset-freeze capabilities directly into tokens on the Cardano network.

The framework operates through shared smart contracts, ensuring that transfers comply with predefined rules before completion. Key features include rejecting transfers to buyers who fail identity checks and blocking tokens from reaching sanctioned addresses. These restrictions apply whenever the assets move, regardless of the wallets or services involved.

Supported at launch by wallets like Eternl and GeroWallet, as well as blockchain explorer CardanoScan and developer tool BloxBean, the standard has been certified by the Capital Markets and Technology Association. The foundation emphasizes that the new standard leverages existing Cardano capabilities, eliminating the need for a hard fork.

Frederik Gregaard, CEO of the Cardano Foundation, highlighted that the rules must travel with the asset and be enforced during every transfer. Issuers can choose from existing rule sets or create their own, with the flexibility to update them as regulations evolve. However, the model introduces risks, such as authorized parties potentially transferring tokens without holder consent, prompting lending platforms to reassess the acceptability of such tokens as collateral.