The XRP Ledger (XRPL) has introduced the XLS-85 Token Escrow update on mainnet on February 12, expanding its built-in escrow functionality beyond XRP.
Specifically, the new upgrade, which passed with 88% validator consensus, has ensured that native escrow capabilities now include Trustline-based tokens (IOUs) and Multi-Purpose Tokens (MPTs).
In other words, the existing EscrowCreate, EscrowFinish, and EscrowCancel transaction types have been upgraded to support every eligible token issued on the network.
This shift follows the recent activation of Permissioned Domains on XRPL, another upgrade designed to expand institutional-grade functionality across the network.
What does XLS-85 mean for XRP?
XLS-85 does not directly boost XRP demand or alter its supply mechanics. Instead, its importance lies in strategic positioning. That is, if stablecoin issuers or institutional participants choose XRPL thanks to native token escrow support, network activity could increase.
Since XRP functions as the gas and reserve asset, greater participation could, however, translate into higher XRP demand. This, in turn, would go hand-in-hand with Ripple’s recently announced plans to keep XRP at the very forefront of its long-term ambitions, particularly institutional adoption.
A range of applications for the expanded escrow functionality likewise includes token vesting schedules and grant distributions, conditional payments and over-the-counter (OTC) swaps, and tokenized rights and Real World Asset (RWA) unlock structures.
Moreover, XLS-85 introduces a native locking mechanism for all supported tokens on the Ledger. The feature enables structured settlements, compliance-oriented flows, and predictable release conditions directly on-chain without relying on third-party custodians or off-chain agreements.
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Source: https://finbold.com/xrp-ledger-expands-native-escrow-functionality-beyond-xrp/
