XRP Ledger Upgrade Expands Token Escrow: Will XRP Price Benefit?

The XRP Ledger (XRPL) activated the XLS-85 amendment on February 12, 2026, bringing native escrow to all Trustline-based tokens (IOUs) and Multi-Purpose Tokens (MPTs). This upgrade opens new use cases for secure, programmable asset settlement.

Moreover, the move expands XRPL’s utility, and market watchers suggest the upgrade could pave the way for institutional capital deployment. But will this impact XRP’s price? That is a question that remains to be answered.

XLS-85 Amendment Extends Escrow Functionality Beyond XRP 

XLS-0085 expands how escrow works on the network. Until now, XRPL’s native escrow functionality was limited to XRP. With XLS-85, that restriction is removed.

“From stablecoins like RLUSD to Real World Assets, the XRPL now supports secure, conditional, on-chain settlement for all assets,” RippleX stated.

XLS-85 upgrades the existing EscrowCreate, EscrowFinish, and EscrowCancel transaction types. Importantly, token issuers retain control. Tokens must explicitly allow escrow functionality through issuer-level flags. This preserves compliance controls and token governance structures already in place.

This is not just a minor tweak. It shifts XRPL from being a network where only XRP could be escrowed to one where assets gain native time-lock and conditional release functionality.

That opens the door to:

• Token vesting schedules
• Institutional settlement workflows
• Treasury management for issued assets
• Conditional stablecoin payouts
• Structured financial products built directly on XRPL

“Token Escrow (XLS-85) is an upgrade to the #XRP Ledger, which plugs directly into it and makes the DEX institution-ready. The Institutions will begin deploying CAPITAL on #XRPL starting 12 February,” an analyst wrote.

The latest update comes shortly after XRPL activated Permissioned Domains earlier this month to expand institutional use cases.

XRPL’s Token Escrow Upgrade Raises Questions About XRP’s Long-Term Price Impact

It’s worth noting that while the activation of XLS-0085 does not directly increase demand for XRP, it could influence the asset’s long-term price trajectory through broader network effects.

The amendment extends native escrow functionality to Trustline-based tokens and Multi-Purpose Tokens, rather than expanding escrow usage for XRP itself. That means the upgrade does not automatically create additional XRP lockups or immediate supply constraints.

However, the structural implications are more nuanced. If token issuers, including stablecoin providers, RWA platforms, or institutions, adopt XRPL because it now supports native token escrow:

• Token issuance on XRPL could increase
• Transaction volume may rise
• The number of active accounts could expand
• Demand for XRP may grow due to fees and reserve requirements

That increases network usage, and XRP is still the gas and reserve asset of the ledger. Higher utility → potentially higher demand for XRP → possible price appreciation. But this depends entirely on real adoption.

Upgrades like XLS-0085 signal that XRPL is positioning itself as a tokenized finance infrastructure. If markets perceive XRPL as becoming more competitive with Ethereum or other token platforms, sentiment alone can influence price. Crypto markets often price in narrative and positioning, not just usage.

In the short term, price impact may depend more on market sentiment than on immediate usage metrics. Over the longer term, sustained ecosystem growth driven by token-enabled escrow could contribute to stronger network fundamentals, which historically play a role in digital asset valuation.

For now, XRP continues to face challenges along with the broader market. At press time, it was trading at $1.36, down 1.35% over the past day.