Cardano merges CIP-113, a standard for tokens that need a script to move
Serguey Asael Shinder2 min readThe Cardano Improvement Proposals repository merged CIP-113, "Programmable token-like assets", on 29 September. The pull request had been open since January 2023. The merged document carries the status Proposed and lists Michele Nuzzi, Matteo Coppola, Philip DiSarro and Giovanni Gargiulo as authors.
The problem it addresses, described in CPS-0003, is that Cardano native tokens move freely once minted. Issuers cannot enforce compliance rules, freeze accounts or seize tokens for legal reasons, cannot implement allowlists, denylists or KYC checks on transfers, and cannot meet the transfer restrictions tokenized securities require. CIP-113 defines "programmable tokens" as tokens that need a script to succeed before they change owner.
The design avoids a hard fork by using existing primitives: native tokens, stake credentials and the "withdraw-zero" pattern. All programmable tokens sit at addresses whose payment credential is one shared script, and ownership is decided by the stake credential, which gives each user a deterministic "smart wallet" address that wallets can support immediately. An on-chain registry, a sorted linked list of UTxOs, makes each programmable token discoverable. The shared script does almost nothing itself: it reads the protocol's live wiring from a parameters UTxO and requires a global validator, which in turn requires the delegate for the declared action, such as a transfer or a third-party action, to run. Because the wiring is read at runtime, dispatch can be re-pointed without changing the address where any token lives.
Developers are pointed to the Cardano Foundation's documentation repository and an IOHK reference implementation.
Why it matters
Regulated stablecoins and tokenized securities need an issuer who can say no to a transfer, and Cardano's native tokens could not. CIP-113 gives the ecosystem one shared way to do it, which matters more than any single implementation: wallets and exchanges can support one standard rather than a different contract per issuer.