Cardano just moved compliance inside the token itself
The Cardano Foundation has taken CIP-0113, a programmable token standard, live on mainnet. It lets an issuer attach rules to an asset: who may receive it, KYC and AML checks, sanctions screening, and the ability to freeze, seize or restrict holdings. The rules are enforced by the ledger when a token is minted, burned or transferred rather than by an off-chain server, and they apply only to tokens whose issuers adopt the standard.
Three things worth sitting with:
1. It moves the enforcement point. A freeze has usually needed a venue or a custodian to cooperate. When the rule lives in the asset, the issuer can act without anyone else's help.
2. It changes what a balance is. A token held under these rules is a permissioned claim rather than a bearer instrument, and the gap only shows up on the day someone exercises the permission.
3. Composability assumes a token behaves the same for every holder. Once transfers are conditional per address, any protocol integrating that asset inherits a veto it did not write and cannot easily audit.
What I am watching: whether those rule sets get published in a form integrators can actually read before they list the asset.
#Cardano #Regulation
Not financial advice. Do your own research.
The Cardano Foundation has taken CIP-0113, a programmable token standard, live on mainnet. It lets an issuer attach rules to an asset: who may receive it, KYC and AML checks, sanctions screening, and the ability to freeze, seize or restrict holdings. The rules are enforced by the ledger when a token is minted, burned or transferred rather than by an off-chain server, and they apply only to tokens whose issuers adopt the standard.
Three things worth sitting with:
1. It moves the enforcement point. A freeze has usually needed a venue or a custodian to cooperate. When the rule lives in the asset, the issuer can act without anyone else's help.
2. It changes what a balance is. A token held under these rules is a permissioned claim rather than a bearer instrument, and the gap only shows up on the day someone exercises the permission.
3. Composability assumes a token behaves the same for every holder. Once transfers are conditional per address, any protocol integrating that asset inherits a veto it did not write and cannot easily audit.
What I am watching: whether those rule sets get published in a form integrators can actually read before they list the asset.
#Cardano #Regulation
Not financial advice. Do your own research.