The Cardano Foundation said Wednesday at TOKEN2049 that CIP-0113, Cardano’s programmable token standard, is now live on the Cardano mainnet.
The standard allows issuers of stablecoins, tokenized funds, bonds and other regulated assets to build compliance rules directly into their tokens. Those rules can include KYC and AML checks, sanctions screening, freeze and seize powers, and transfer restrictions. The Cardano ledger enforces them each time a token is transferred, minted or burned, according to the Foundation.
The Foundation said the standard followed joint development with Cardano community experts and the completion of multiple independent security audits. It did not identify the auditors in its statement. The rollout required no hard fork.
How the standard works
Tokens issued under CIP-0113 remain native Cardano assets, the Foundation said. The framework is built on Cardano’s extended UTXO, or EUTXO, ledger model and attaches compliance logic to the token itself.
Once integrated, wallets, explorers and applications can handle those tokens like any other Cardano asset, according to the Foundation. It also said execution costs remain predictable no matter how many inputs a transaction contains.
Issuers can choose modular rule sets, which the Foundation calls modules, or write their own. Those rules can be updated as regulations change without changing the core standard.
Eternl, GeroWallet, CardanoScan and BloxBean supported the launch.
Institutional tokenization use cases
Frederik Gregaard, chief executive of the Cardano Foundation, said, 「Programmable tokens on Cardano remain native assets on the ledger, with compliance enforced by the network itself rather than by a wrapper or a closed system.」
He said the launch is aimed at institutions choosing a blockchain for tokenization, including banks, fund managers and stablecoin issuers. In his words, it shifts the discussion from what Cardano could do to what it does.
The Foundation also pointed to the Bank for International Settlements, or BIS, and the International Monetary Fund, or IMF. It said both institutions have identified programmability as central to the next generation of tokenized financial markets.
Swiss certification recognition
In a separate part of its statement, the Foundation said it and the Swiss Capital Markets and Technology Association, or CMTA, announced that CMTA now treats Cardano’s CIP-113 Programmable Asset Tokens as equivalent to its CMTAT smart contract for certification purposes.
According to the Foundation, the tokens include the mandatory functions listed under the CMTAT framework and may be used to certify that ledger-based equity securities meet CMTA standards.
Timeline and next steps
The Foundation released its Programmable Tokens Platform and the open-source CIP-0113 reference implementation on March 9, along with a live preview on Cardano’s Preview testnet.
At that time, it said a professional audit of the core smart contracts was a necessary step before any production use.
The Foundation said it will continue working with projects and institutions building on the standard, including continued work on a securities module for regulated financial instruments.