Cardano’s Programmable Token Standard Goes Live With Built-In KYC and Freeze Controls

The Cardano Foundation announced on Wednesday at TOKEN2049 that CIP-0113, Cardano’s programmable token standard, is live on Cardano mainnet. Issuers of stablecoins, tokenized funds, bonds and other regulated assets can now build compliance rules, including KYC and AML checks, sanctions screening, freeze and seize powers, and transfer restrictions into their tokens, with the Cardano ledger enforcing the rules each time a token is transferred, minted or burned.

The Foundation said the standard followed joint development with Cardano community experts and the completion of multiple independent security audits. Its statement did not name the auditors. The standard required no hard fork.

Get Unchained’s crypto news in your inbox with the free Unchained Daily newsletter.

Tokens issued under CIP-0113 stay native Cardano assets. The standard is built on Cardano’s extended UTXO (EUTXO) ledger model and attaches the compliance logic to the token itself, according to the Foundation. Once integrated, wallets, explorers and applications can treat the tokens like any other Cardano asset, it said. Execution costs remain predictable however many inputs a transaction has, the Foundation said.

Issuers can pick modular rule sets, which the Foundation calls modules, or write their own, and update them as regulation changes without altering the core standard. Eternl, GeroWallet, CardanoScan and BloxBean supported the launch.

Frederik Gregaard, the Foundation’s CEO, said the design relies on the network itself: “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.” He said the launch is aimed at institutions picking a blockchain for tokenization, including banks, fund managers and stablecoin issuers, and “moves the conversation from what Cardano could do to what it does.”

The Foundation also pointed to the Bank for International Settlements (BIS) and the International Monetary Fund (IMF), which it said have identified programmability as central to the next generation of tokenized financial markets.

Separately, the Foundation’s statement said it and the Swiss Capital Markets and Technology Association (CMTA) announced that CMTA now treats Cardano’s CIP-113 Programmable Asset Tokens as an equivalent to its CMTAT smart contract for certification purposes. The tokens carry the mandatory functions that the CMTAT framework lists and may be used to certify that ledger-based equity securities meet CMTA’s standards, the Foundation said.

The Foundation released its Programmable Tokens Platform and the open-source CIP-0113 reference implementation on March 9, with a live preview on Cardano’s Preview testnet. At the time it said a professional audit of the core smart contracts was a necessary step before any production use.

The Foundation said it will keep working with projects and institutions building on the standard, including continued work on a securities module for regulated financial instruments.

Related Listen: Should Stock Tokens Be Limited to KYC’d Users? Or Be Tradeable by Anyone?

{"@context":"http:\/\/schema.org\/","@id":"https:\/\/unchainedcrypto.com\/cardanos-programmable-token-standard-goes-live-with-built-in-kyc-and-freeze-controls\/#arve-youtube-wyeaoc9tydg","@type":"VideoObject","embedURL":"https:\/\/www.youtube-nocookie.com\/embed\/wYeaOC9tydg?feature=oembed&iv_load_policy=3&modestbranding=1&rel=0&autohide=1&playsinline=1&autoplay=0"}

The post Cardano’s Programmable Token Standard Goes Live With Built-In KYC and Freeze Controls appeared first on Unchained.