XRP Ledger’s escrow feature allows sending conditional XRP payments
The XRP Ledger, XRPL, has shared a proposed update to allow issued tokens to be used in the same payment and escrow channels as XRP is currently being worked on.
XRP Ledger Standard Proposal:
“Token-Enabled Escrows and Payment Channels”
— XRPL Labs (@XRPLLabs) April 12, 2022
XRPL proposes update to allow issued tokens to be used in payment channels besides XRP
XRPL currently supports a variety of negotiable instruments on the ledger, including escrow, payment channels, and checks. XRP Ledger’s escrow feature allows conditional XRP payments to be sent. Margins are conditional payments that reserve XRP and come out later if specific conditions are met.
XRP is placed exclusively in a locked escrow account. No one can use or destroy XRP until escrow has been completed or terminated. A payment channel is a more advanced feature that allows sending “asynchronous” XRP payments that can be broken down and settled later.
However, these payment channels and escrow only support the original asset, XRP. This limitation is a barrier to the widespread use of escrow funds and payment channels for various reasons, including regulatory compliance, reluctance to hold counterpart fewer assets (e.g., XRP), risk exchange rate risk, and volatility.
According to a release on Github, this XLS proposes to modify the XRPL protocol that has the following goals: to enable escrow institutions and payment channels to use issued tokens or replaceable tokens. It also aims to allow issuers to maintain freezing and authorization control over their issued currencies even while locked into the instruments.
RippleNet GM Asheesh Birla recently took to Twitter to clarify some ”misconceptions” about Ripple’s ODL following Strike’s Shopify integration.
The top executive has stated that using digital assets such as XRP is a component of the ODL solution. He further noted that despite particular challenges such as volatility and regulatory concerns regarding the liquidity of cryptocurrencies, Ripple currently has more than 20 ODL markets open as it continues to push strong global coverage. Ripple’s On-Demand Liquidity (ODL) allows customers to instantly transfer funds around the world without the need for a pre-reimbursed account.
- Ripple Presently Has More Than 20 ODL Markets Open As It Continues To Push Global Coverage
- Exchanges Moved Nearly 332 Million XRP With Ripple Participating In These Transactions In The Past Two Days