XRP Ledger’s escrow feature allows sending conditional XRP payments
As shared on Twitter XRPL handle, a proposed update to allow issued tokens to be used in payment channels and escrows, just like XRP, is currently in the works.
The XRPL (XRP Ledger) currently supports a variety of on-ledger negotiable instruments, including escrows, payment channels and checks. The XRP Ledger’s escrow feature allows sending conditional XRP payments. Escrows are conditional payments that set aside XRP and give it out later if specific conditions are met.
XRP that has been set aside in an escrow account has been blocked. No one can use or destroy XRP until the escrow has been completed or successfully terminated. Payment Channels are a more advanced feature that allows “asynchronous” XRP payments to be sent that can be split into small amounts and settled later.
However, these payment channels and escrows support only the native asset, XRP. This limitation is a barrier to wider-spread use of escrows and payment channels for a variety of reasons, including regulatory compliance, a reluctance to keep a counter-party-free asset (i.e., XRP), exchange-rate risk and volatility.
According to a release from Github, this XLS proposes to introduce an amendment to the XRPL protocol which has the following objectives: to allow escrows and payment channels to use issued tokens or fungible tokens. It also aims to allow issuers to retain freezing and authorization control over their issued currencies even when they are locked in instruments.
As previously covered by U.Today, RippleNet GM Asheesh Birla recently took to Twitter to clarify some ”misconceptions” about Ripple’s ODL in the wake of Strike’s Shopify integration.
The senior executive said that the use of digital assets such as XRP is one of the components of the ODL solution. He further notes that despite particular challenges such as volatility and regulatory concerns associated with crypto liquidity, Ripple currently has over 20 ODL markets open as it continues to push global coverage. Ripple’s On-Demand Liquidity (ODL) allows customers to instantly transfer money around the world at any time without the need for pre-funded accounts.
