Cardano Adds Built-In Freeze and Seize Powers for Issuers of Regulated Tokens

The Cardano Foundation, a Swiss nonprofit that supports the network’s development, has switched on a new token standard called CIP-0113 after independent security audits. Anyone issuing stablecoins, funds or bonds on Cardano can now decide who is allowed to receive their tokens, and can freeze, seize or move holdings when the rules call for it. Banks and fund managers cannot put regulated assets onchain if tokens move freely, since buyers need to clear identity checks, sanctioned wallets must be shut out, and a regulator or court may order assets locked. Foundation CEO Frederik Gregaard said the rules must travel with the asset and apply each time it changes hands.

How the Compliance Rules Are Enforced

The tokens are kept inside a shared smart contract, and the machines validating transactions test each transfer against the chosen rules before approving it. A fund open only to verified investors could turn away a transfer to someone without clearance, and a stablecoin issuer could block a sanctioned address. Issuers can adopt ready-made rule sets or write their own, then change them as laws shift. No hard fork was needed because the design uses features Cardano already had. Eternl, GeroWallet, CardanoScan and BloxBean support the launch, and the foundation also won recognition under the Capital Markets and Technology Association’s certification framework, used in Switzerland for tokenized shares.

Holder Risks and Competing Token Standards

Cardano is not alone here. Ethereum has ERC-3643, Solana offers transfer controls through token extensions, and the XRP Ledger lets issuers restrict holders and claw back balances. For users, owning these tokens can mean accepting that an authorized party may move funds without their consent. The specification advises lending platforms to check those powers before taking such a token as collateral. Meanwhile,

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