XRP Ledger unlocks a new era of token custody, and after the launch of XLS-85, assets like RLUSD can be locked on-chain

February 13 News, XRP Ledger has officially activated the Token Custody Amendment XLS-85, allowing users to create custody accounts for issued fungible tokens. This means that, in addition to XRP itself, Trust Line tokens and Multi-Function Tokens (MPT) can also be locked on-chain under certain conditions, providing more flexible asset management options for decentralized finance and enterprise applications.

The amendment regained support from 30 validators on January 30, 2026, reaching the activation threshold, and went live two weeks later. Previously, XLS-85 was close to passing in September 2025, but disagreements arose due to incompatibility issues with the MPT standard, causing support to drop to 16 votes. XRPL dUNL validator Vet pointed out flaws in custody accounting related to transfer fees and supply tracking. The community subsequently introduced fixTokenEscrowV1, incorporated into Rippled v3.0.0, restoring confidence and driving final activation.

With the new functionality in effect, the custody mechanism has been extended to Trust Line tokens such as RLUSD and MPT assets. Users can lock tokens under specific conditions for settlement payments, compliant custody, and DeFi collateralization. It is important to note that issuers must enable the relevant flags for tokens to qualify for custody; additionally, issuers cannot custody their own issued assets but can receive custody tokens.

Regarding custody types, XRPL supports three modes: time-based, condition-based, and combined custody. Time-based custody releases assets after a specified date; condition-based custody depends on cryptographic fulfillment conditions; and combined custody activates when both time and conditions are met. These mechanisms provide enhanced security and control for cross-border settlements, on-chain financing, and automated contracts.

Industry experts believe that the launch of XLS-85 marks a significant step forward for XRP Ledger in bringing real-world assets on-chain and expanding enterprise-level applications, as well as providing a more mature infrastructure for tokenized asset management.