Key Highlights:
- Cardano Foundation announced the mainnet launch of the new programmable token standard, CIP-0113, on October 7th, during TOKEN2049 Singapore.
- The mechanism allows token issuers to embed custom parameter sets or modules such as KYC, AML, sanction screeding and transaction restriction into token architecture.
- The asset issued from the programmable token standard retains a native Cardano status, keeping transaction fees stable regardless of complex data inputs.
Cardano Foundation, a Swiss-based, not-for-profit organisation responsible for the growth and oversight of the Cardano blockchain ecosystem, has announced the mainnet launch of Cardano’s new programmable token standard, CIP-0113. The team disclosed the new architecture framework on October 7th, during the TOKEN2049 conference at the Marina Bay Sands luxury resort in Singapore, highlighting it as an extensive joint development effort with the Cardano community following multiple independent security audits.
The mechanism enables issuers of stablecoins, tokenised funds, bonds, and other regulated assets to embed compliance rules such as Know-Your-Customer (KYC) and Anti-Money Laundering (AML) checks, sanctions screening, freeze and seize, and transfer restrictions directly into their token architecture. Since compliance verification is intrinsic to the Cardano’s extended UTXO (EUTXO) ledger architecture, it will enforce custom parameter sets in real time for each transaction, mint, and burn.
Cardano’s CIP-0113 Brings Compliance Rules Into Token Architecture
The new programmable token standard, known as CIP-0113, enables asset managers and institutions to integrate compliance logic directly in the token’s code. Under this framework, assets will retain a Cardano status. As a result, they’re distributed across user wallets, ledger explorers and apps just like any other network asset, with the execution fees remaining entirely predictable and stable, regardless of the complexity of the input bundling.
The upgrade is a software level implementation, therefore the underlying protocol does not need to be hard forked to be in use. Asset creators can choose from pre-built modular rule sets (referred to as modules) or write entirely unique compliance rules. The instructions can be changed as the regulatory environment evolves without changing the core network standard.
The architecture is also in line with the recommendations of international financial market standard-setting bodies such as the International Monetary Fund (IMF) and the Bank for International Settlements (BIS) that suggest that hard-coded asset programmability is essential for the next generation of tokenized financial markets.
Frederik Gregaard, CEO of the Cardano Foundation, said: “Regulators have been clear about what tokenised financial assets need. The rules have to travel with the asset and be enforced every time it moves. Cardano can now do that natively, and we believe the way we do it is unique. 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. For banks, fund managers and stablecoin issuers deciding where to tokenise, that moves the conversation from what Cardano could do to what it does.”
Regulatory Certifications and Ecosystem Support
The Swiss Capital Markets and Technology Association (CMTA) has officially recognized assets created using the CIP-0113 framework as smart contract equivalents for the purpose of the CMTA certification scheme, in collaboration with the Cardano Foundation.
These programmable tokens meet all requirements of the mandatory functions specified in the CMTAT protocol, making them suitable to be certified as ledger-based equity securities under the Swiss regulatory requirements. This certification simplifies the introduction of Swiss ledger-based securities, reduces due diligence costs and preserve a chain-agnostic approach.
A number of popular infrastructure solutions, explorers, and toolkits for blockchain integration are available for the standard, such as Eternl, GeroWallet, CardanoScan, and BloxBean. With this support, token issuers and network users can manage and validate these programmable tokens with the common applications they use.
In the future, the Cardano Foundation will work with institutions that adopt the standard to develop an advanced securities module tailored for highly regulated financial products.
