The Cardano Foundation has introduced CIP-0113, a token standard that allows issuers of regulated assets to restrict recipients and freeze, seize or transfer holdings under defined rules.
The standard is aimed at regulated stablecoins, funds and bonds. According to the foundation, CIP-0113 applies compliance checks to every transfer, including identity verification and sanctions screening, without requiring a hard fork of the Cardano network.
Issuers can choose existing rule sets, create their own and update them as regulations change. At the same time, holders may be subject to controls that let authorized parties move tokens without their consent, depending on how the rules are configured.
CIP-0113 is now live on Cardano
The Swiss nonprofit that supports Cardano’s development said Wednesday that the Cardano improvement proposal, known as CIP-0113, is live on the network after independent security audits.
Most crypto tokens can be sent by any holder to any wallet. Banks and fund managers bringing regulated assets onchain cannot operate that way.
They need to keep tokens away from buyers who have not passed identity checks and from sanctioned addresses. They also need the ability to freeze assets when a regulator or a court orders it. CIP-0113 builds those controls into the token itself, so the network checks the rules before a transfer is allowed to go through.
Rules move with the asset
The foundation gave several examples of how the standard could be used. A fund sold only to verified investors could reject a transfer to someone who has not completed identity checks. A stablecoin issuer could stop its tokens from reaching a sanctioned address. Those restrictions apply whenever the tokens move, including transfers between holders using different wallets or services.
The design keeps the tokens in a shared smart contract, a program on Cardano that governs how they can be moved. Computers validating transactions enforce the selected rules before accepting a transfer. The foundation said the system relies on capabilities already available on Cardano, which is why no hard fork or change to the network’s underlying rules was needed.
Frederik Gregaard, chief executive of the Cardano Foundation, said in a statement to CoinDesk: 「The rules have to travel with the asset and be enforced every time it moves.」
Issuers can customize rules, and tools already support the rollout
The foundation said issuers can adopt prebuilt rule sets or write their own, then update those rules as regulations evolve. It named the wallets Eternl and GeroWallet, blockchain explorer CardanoScan and developer-tool provider BloxBean among the tools supporting the launch.
Other blockchains already offer similar models
Cardano is not alone in this area. Ethereum already has permissioned token standards such as ERC-3643. Solana has added transfer controls through token extensions. The XRP Ledger also supports tokens whose issuers can restrict holders and claw back balances.
Holding one of these tokens can mean accepting powers that go beyond blocking a payment. Depending on the rule set, an authorized party may be able to move tokens without the holder’s consent. The technical specification also tells lending services to examine those powers before accepting a token as collateral.
Foundation also disclosed certification recognition
Alongside the launch, the Cardano Foundation said it had been recognized under the certification framework of the Capital Markets and Technology Association, a Swiss industry body whose standards are used for issuing tokenized shares.
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