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Cardano Foundation Introduces CIP-0113 Token Standard for Enhanced Compliance
On October 7, 2026, the Cardano Foundation announced the launch of the CIP-0113 token standard during the TOKEN2049 event. This new standard allows issuers of Cardano native tokens to implement compliance controls directly within the tokens, enabling them to freeze, seize, and restrict assets as needed. The enforcement of these rules occurs on the Cardano ledger itself, ensuring that compliance measures are integrated into the token's functionality without relying on external servers or dashboards.
CIP-0113 facilitates the attachment of compliance rules related to Know Your Customer (KYC) and Anti-Money Laundering (AML) checks, sanctions screening, and transfer restrictions. The standard is designed primarily for regulated assets, such as stablecoins and tokenized funds, where issuers require the ability to block transactions involving sanctioned addresses or recover funds. The implementation of CIP-0113 does not necessitate a hard fork, allowing tokens to remain native assets within Cardano's extended Unspent Transaction Output (eUTXO) model, while maintaining predictable execution costs.
The standard features a modular design, allowing issuers to create custom modules or modify existing ones over time. Wallets such as Eternl and GeroWallet, along with the block explorer CardanoScan, have already integrated support for CIP-0113. Additionally, the Swiss Capital Markets and Technology Association (CMTA) has recognized tokens compliant with CIP-0113 as comparable to its CMTAT framework, which is used for certifying equity securities on-chain in Switzerland.
While CIP-0113 offers significant compliance capabilities, it also introduces complexities, particularly regarding the handling of restricted assets within shared outputs. This necessitates careful management by wallets and decentralized finance (DeFi) protocols to avoid complications when dealing with mixed asset types. Importantly, the controls apply only to tokens whose issuers choose to adopt the standard, ensuring that the native ADA token remains unaffected by these compliance measures.
Source: KLEA News