Cardano has taken a decisive step toward institutional blockchain adoption with the CIP-0113 update. The new programmable token platform enables the complete tokenization of real-world assets (RWA) with regulatory control functions for the first time. With total value locked already exceeding the $1.1 billion mark, the network is positioning itself as a regulation-friendly alternative to Ethereum and Solana.
CIP-0113 revolutionizes token programming on Cardano
The new Cardano Improvement Proposal transforms simple native assets into programmable objects with built-in business logic. Whereas token issuers previously had no control over their assets after launch, they can now implement complex rules. For example, companies can freeze stock tokens in response to legal orders, recover lost keys, or apply different compliance sets for securities and real estate.
The technical implementation is based on Cardano’s Extended UTXO model, which was designed for such advanced functionalities from the outset. Unlike Ethereum, where smart contracts were added later, Cardano’s programmable token functionality is natively integrated into the blockchain architecture. This results in lower transaction costs and higher security, as fewer external smart contract interactions are required.
The testnet implementation is already running successfully with several pilot projects. Developers report significantly simplified token creation compared to ERC-20 standards. The full security audit is being conducted by renowned auditing firms before regulated financial product templates are made available for the mainnet launch.
Babel Fees simplify institutional blockchain usage
Input Output Global (IOG) reports significant progress on nested transactions, which are essential for Babel Fees. This groundbreaking innovation allows users to pay transaction fees with any token instead of ADA. For institutions, this means a significant gain in convenience: a bank issuing digital bonds no longer has to impose the complex detour of ADA purchases on its customers.
The streamlining feature eliminates one of the biggest barriers to entry for traditional financial institutions. Until now, companies had to set up complicated treasury management systems to manage different cryptocurrencies for transaction fees. With Babel Fees, they can use their own tokenized assets directly for network fees, significantly reducing operational complexity.
Initial partnerships with fintech companies are already demonstrating the potential: a European asset manager was able to reduce its operating costs by 40 percent by using Babel Fees to manage tokenized investment funds. These efficiency gains could significantly simplify the entry into blockchain use, especially for business customers.
Midnight Network offers data protection advantage over competitors
Cardano’s planned Midnight Network combines zero-knowledge proofs with selective data sharing, creating a decisive competitive advantage. While Ethereum and Solana remain fully transparent blockchains, institutions can use Midnight to conduct confidential transactions that still meet regulatory requirements.
The technology is based on zk-SNARKs (Zero-Knowledge Succinct Non-Interactive Arguments of Knowledge), which enable mathematical proofs without revealing sensitive data. This data protection is essential for RWA tokenization of personal loans, real estate, or corporate bonds. Banks, for example, can tokenize loan portfolios without making customer data or credit ratings public.
