Cardano Introduces New Token Standard CIP-0113 for Asset Control

The Cardano Foundation has introduced the CIP-0113 token standard, which allows issuers of regulated assets to restrict recipients and freeze or confiscate assets. The standard was launched on Wednesday after independent security audits were conducted. It is designed for regulated stablecoins, funds, and bonds that require identity checks, sanctions control, and other transfer rules directly embedded into the asset itself. The CIP-0113 standard ensures compliance for each transaction, including identity and sanctions checks, without the need to fork the Cardano network. Issuers can choose or customize rules and update them as legislation changes. At the same time, holders may be subject to oversight that allows authorized parties to move tokens without their consent. This means that regulators or courts can request the freezing of assets if necessary.

The new standard embeds these rules directly into the tokens, allowing the network to verify them before a transaction is completed. "Rules must accompany the asset and be enforced every time it moves," said Frederik Gregaard, CEO of the Cardano Foundation, in a statement to CoinDesk. The design of the standard allows tokens to be held in a common smart contract that governs how they can be moved. Computers verify transactions by executing the chosen rules before accepting the transfer.

The foundation also announced its recognition under the certification system of the Association of Capital Markets and Technology, a Swiss industry organization whose standards are used for issuing tokenized shares. While other blockchains, such as Ethereum and Solana, already offer versions of similar functionality, Cardano's CIP-0113 standard represents a new step for blockchain technologies aiming to meet the demands of the regulated market. It is also reported that ADA, the Cardano token, has fallen by 4.5% over the past 24 hours amid a decline in the overall cryptocurrency market.