The foundation, a Swiss nonprofit supporting Cardano's development, announced Wednesday that the standard, a Cardano improvement proposal known as CIP-0113, is live on the network following independent security audits
Most crypto tokens can be sent by anyone who holds them to any wallet. Banks and fund managers putting regulated assets onchain cannot allow that
They have to keep tokens away from buyers who have not passed identity checks and from sanctioned addresses, and must be able to freeze assets when a regulator or court orders it
The new standard builds those controls into the token, so the network checks the rules before any transfer goes through
A fund sold only to verified investors could use it to 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 between holders using different wallets or services
The design keeps the tokens in a shared smart contract, a program on Cardano that controls how they can be moved. Computers checking transactions enforce the chosen rules before accepting a transfer. It uses capabilities already available on Cardano and required no hard fork, a change to the network's underlying rules
"The rules have to travel with the asset and be enforced every time it moves," Frederik Gregaard, chief executive of the Cardano Foundation, said in a statement to CoinDesk
Issuers can select existing sets of rules or write their own, and update them as regulations change. The foundation named wallets Eternl and GeroWallet, blockchain explorer CardanoScan and developer-tool provider BloxBean among the tools supporting the launch
Other blockchains already offer versions of this. Ethereum has permissioned token standards such as ERC-3643, Solana added transfer controls through its token extensions, and the XRP Ledger supports tokens whose issuers can restrict holders and claw back balances
Holding one of these tokens can also mean accepting powers that extend beyond blocking a payment. Depending on its rules, an authorized party could move tokens without the holder's consent. The technical specification tells lending services to examine those powers before accepting a token as collateral
The foundation also announced recognition under the certification framework of the Capital Markets and Technology Association, a Swiss industry body whose standards are used for issuing tokenized shares
Cardano’s ADA is down 4.5% in the past 24 hours alongside a broader market drop
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