Cardano Launches Token Standard for Regulatory Compliance
The Cardano Foundation has introduced a new token standard that empowers issuers of stablecoins, funds, and bonds to enforce restrictions on asset transfers. Known as CIP-0113, this standard allows issuers to freeze, seize, or restrict asset movements based on regulatory requirements.
The standard is now live on the Cardano network following independent security audits. It addresses the needs of financial institutions that must comply with regulations, such as preventing transfers to unverified buyers or sanctioned addresses. The rules are embedded in the tokens themselves, ensuring that the network checks these conditions before any transfer is processed.
The design relies on a shared smart contract to manage token movements, leveraging existing capabilities on Cardano without requiring a hard fork. Issuers can choose from predefined rule sets or create their own, allowing flexibility as regulations evolve. Tools supporting the launch include wallets like Eternl and GeroWallet, blockchain explorer CardanoScan, and developer-tool provider BloxBean.
Other blockchains, such as Ethereum, Solana, and the XRP Ledger, already offer similar functionalities. Holding tokens with these controls may also mean accepting additional powers, such as the ability for authorized parties to move tokens without the holder's consent. Lending services are advised to review these powers before accepting such tokens as collateral.