Cardano merges token standard giving issuers freeze and transfer controls

Cardano has merged a new token standard designed to give institutional issuers the freeze and transfer-control powers that regulated finance typically demands, but the same mechanism can temporarily block unrelated tokens bundled in the same transaction. The tradeoff puts new design burdens on wallets and DeFi protocols that will need to track which assets share space with a restricted token before accepting it as collateral.

• CIP-113 merged into Cardano’s main improvement-proposal repository on Sept. 29, after years of development.
• Under Cardano’s eUTXO model, a freeze on one programmable token can block spending of unrelated tokens and ADA sharing the same output.
• CIP-113’s status remains “Proposed,” with “Active” status requiring mainnet issuance, end-to-end testing and support from a widely adopted wallet.

• Sept. 29 date CIP-113 merged into Cardano’s CIP repository
• CIP-113 proposal number for Cardano’s new programmable-token compliance standard

Cardano moved closer to supporting institutional-grade compliance controls this week, according to reporting by CryptoSlate. CIP-113, a proposal for programmable tokens carrying issuer-controlled transfer rules, merged into Cardano’s main improvement-proposal repository through a pull request on Sept. 29. The standard is built to let issuers attach freezes, denylists and other compliance controls to stablecoins, securities and tokenized real-world assets without abandoning Cardano’s extended unspent transaction output, or eUTXO, model.

CIP-113 merged on Sept. 29 but its status still reads “Proposed”

The merge is a procedural milestone, not a launch. CIP-113’s status remains “Proposed,” and reaching “Active” requires issuance on Cardano’s Preview testnet and mainnet, full end-to-end testing, and support from a widely adopted wallet.

Matteo Coppola, chief executive officer of Fluid Tokens and a contributor to CIP-113, welcomed the merge in a post on X, framing it as the result of years of contributor work.

This means the official standard for programmable tokens on Cardano, including securities, is out.

Matteo Coppola, chief executive officer, Fluid Tokens

The Cardano Foundation has separately described programmable tokens as infrastructure for regulated financial assets, including stablecoins, securities and tokenized real-world assets that may require transfer restrictions or freezes, according to a blog post on its site. That framing is aimed squarely at institutional issuers weighing whether Cardano can meet compliance requirements that public blockchains have often struggled to satisfy.

A freeze on one token can lock unrelated assets sharing its output

Cardano’s eUTXO model treats a transaction output as a single unit even when it holds several tokens plus ADA. Spending that output means spending all of it at once, so a restriction on one programmable asset can determine whether the entire transaction clears.

If an output contains restricted token A alongside unrelated token B and ADA, a freeze or denylist rule on A can leave B and the ADA temporarily inaccessible, even though neither has been independently restricted. CIP-113 addresses that dependency through a restructuring process its reference implementation calls “unfracking,” which can separate A into its own output while B stays under the same holder’s control elsewhere.

Separation is not automatic. An unfracking transaction needs the holder’s authorization and must also satisfy the restricted token’s registered separation rules, which can demand an extra signature, impose script-based conditions, or block restructuring outright. The proposal draws a line between that kind of blockage and outright seizure: an issuer’s control over A does not give it ownership of B, and the reference implementation is designed to preserve unrelated balances during authorized third-party actions.

Wallets must track which policies share an output before accepting a token

The reference implementation recommends single-policy outputs, keeping each programmable token isolated from others, though the validator does not require developers to follow that design. Skipping shared outputs would cut

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