XRP Ledger Activates Expanded Token Escrow Feature

- The amendment, known as XLS-85, went live on the mainnet on February 12, 2026, after achieving an 88% consensus from network validators (30 out of 34). - Previously, the ledger's native escrow feature could only be used with its native token, XRP; this update extends the functionality to all Trustline-based tokens (also known as IOUs) and Multi-Purpose Tokens (MPTs). - Development arm RippleX noted the feature is designed for "Institutional DeFi," enabling use cases like automated token vesting schedules and complex settlement workflows for assets like stablecoins and tokenized real-world assets without custom smart contracts. - Token issuers maintain control over their assets and must explicitly opt-in for their tokens to be escrowed by enabling specific settings like the "Allow Trust Line Locking" flag. - The activation comes as XRP's price has seen significant downturn; after hitting highs around $2.41 in early January 2026, the price fell to a range of $1.46–$1.50 by early February and was trading at approximately $1.36 after the feature went live. - Historically, February has been a challenging month for the asset's price, with data showing a median historical return of -8.12% for the month. - Analysts suggest the upgrade is unlikely to create direct demand for the XRP token itself, as it primarily benefits other assets on the ledger; however, increased network activity could lead to incremental demand for XRP through transaction fees and account reserves over the long term. - The escrow transactions incur fees, and the use of Crypto-Conditions for release, currently limited to the PREIMAGE-SHA-256 type, increases the cost of the EscrowFinish transaction.