The Cardano Foundation has launched a token standard that lets issuers of stablecoins, funds and bonds decide who can receive their assets, and freeze or seize holdings when the rules require it.

The foundation, a Swiss nonprofit supporting Cardano's development, announced Wednesday that the standard, a Cardano improvement proposal known as CIP-0113, is live on the network following independent security audits.

Most crypto tokens can be sent by anyone who holds them to any wallet. Banks and fund managers putting regulated assets onchain cannot allow that.

They have to keep tokens away from buyers who have not passed identity checks and from sanctioned addresses, and must be able to freeze assets when a regulator or court orders it.

The new standard builds those controls into the token, so the network checks the rules before any transfer goes through.

A fund sold only to verified investors could use it to reject a transfer to someone who has not completed identity checks. A stablecoin issuer could stop its tokens from reaching a sanctioned address. Those restrictions apply whenever the tokens move, including between holders using different wallets or services.

The design keeps the tokens in a shared smart contract, a program on Cardano that controls how they can be moved. Computers checking transactions enforce the chosen rules before accepting a transfer. It uses capabilities already available on Cardano and required no hard fork, a change to the network's underlying rules.

"The rules have to travel with the asset and be enforced every time it moves," Frederik Gregaard, chief executive of the Cardano Foundation, said in a statement to CoinDesk.

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