XRP Ledger upgrades to expand escrow functionality: How will support for all tokens affect XRP price dynamics?

February 12, 2026, the XRP Ledger (XRPL) officially activated the XLS-85 (Token Escrow) amendment on the mainnet. This is not only the most significant protocol upgrade for XRPL in 2026 but also marks a key leap in establishing this longstanding payment chain as a foundational infrastructure for “institutional-grade DeFi.”

This article will analyze the technical upgrade’s essence, XRP’s actual supply and demand dynamics, and current market data from Gate to provide a comprehensive understanding.

Upgrade Analysis: From “Single Asset” to “All Tokens” Custody Revolution

Prior to XLS-85, XRPL’s native escrow functionality was limited to locking XRP. This significantly restricted its application in complex financial scenarios.

The core breakthrough of XLS-85 includes:

• Scope Expansion: Now, any trustline-based tokens (IOUs) and multi-purpose tokens (MPT) can utilize native escrow features.
• Retained Control: Token issuers can specify whether their tokens can be escrowed through an “issuer flag,” maintaining compliance and governance flexibility.
• Rich Use Cases: Token vesting plans, institutional settlement workflows, treasury management, conditional stablecoin payments, and more can now operate natively on XRPL.

This means XRPL has evolved from a network where only XRP could be escrowed to a comprehensive asset settlement layer where “any real-world asset (RWA) and stablecoin” can benefit from time locks and conditional releases.

Price Impact Pathways: Why It’s Not a “Direct Bullish” Signal

It must be clarified that XLS-85 does not directly lock XRP nor does it immediately reduce XRP’s circulating supply. Therefore, understanding its impact solely through a simple cause-and-effect lens—“upgrade leads to XRP price increase”—can be misleading. The influence on XRP’s price should be viewed through two indirect pathways:

Path A: Network Effect Driving Demand

If token issuers (such as stablecoins like RLUSD, RWA platforms) choose to issue assets on XRPL now that native token escrow is supported:

• Increased token issuance → Higher network transaction volume;
• Growth in active accounts → Greater reserve requirements for XRP;
• Transaction fees (gas) are paid in XRP and are burned.

Conclusion: Enhanced network utility → Potential increase in XRP demand → Long-term improvement in fundamental value.

Path B: Market Narrative and Sentiment

Crypto markets often price in “structural improvements” in advance. XLS-85 signals that XRPL is becoming a tokenization infrastructure competitive with Ethereum. When the market recognizes this narrative, improved sentiment can itself support price appreciation.

Objective View: Current XRP Price Fundamentals

As of February 13, 2026, real-time data from Gate shows:

Recent performance:

• 7-day change: +1.58%
• 30-day change: -37.25%
• 1-year change: -45.41%

Technical observations:

Currently, XRP is supported at around $1.34 in the short term, with resistance at $1.40. The hourly chart shows a descending channel, RSI below 50, and MACD in a bearish zone. Market sentiment appears optimistic, but buying momentum has shrunk by about 85% from its peak.

Despite the upgrade, XRP’s price has not surged immediately but has slightly retraced along with broader market movements. This aligns with the market behavior of “buy the rumor, sell the news.”

Mid-term Outlook: Institutional Adoption as the True “Price Amplifier”

XLS-85 is not the end goal but the starting point of XRPL’s 2026 institutional-grade feature set.

According to Ripple’s official roadmap for 2026, upcoming features include:

• Permissioned DEX (Q2): Regulated secondary trading environment;
• Lending Protocol (XLS-66): Native lending market, XRP as collateral;
• Confidential Transfers: Privacy transfers based on zero-knowledge proofs;
• Smart Escrows: Programmable escrow conditions.

Evernorth has explicitly announced plans to leverage the upcoming XRP lending protocol (XLS-66) to activate its XRP holdings, potentially generating billions in annualized yields.

The real price catalyst is not “locking XRP” but “activating XRP.” Only when institutions truly adopt XRPL as the primary platform for issuing, trading, and settling RWAs can XRP’s triple utility as “Gas + Reserve + Bridge Asset” be fully unleashed.

Price Forecast and Risk Warning

Based on Gate’s model, under neutral market assumptions:

• 2026 forecast range: $0.743 – $1.47
• Current average forecast: $1.35
• Long-term 2031 forecast: $2.92 (potential +57.00% from today)

It’s important to note:

• These forecasts are based on assumptions about network adoption, macro liquidity, and regulatory environment.
• XLS-85 itself does not guarantee price increases. Without real-world application deployment, technical upgrades alone cannot support the price.
• Short-term prices remain influenced by Bitcoin trends and overall risk appetite.

Conclusion: An Upgrade Preparing for “Next-Generation Finance”

The XRP Ledger upgrade is a subtle but profound paradigm shift. It elevates XRPL from a “XRP chain” to an “asset chain.”

For investors, focus should be on whether, in the next 6-12 months, a wave of RWAs, stablecoins, and institutional funds will utilize XLS-85 to build applications.

At Gate, we continue to monitor on-chain data and whale movements. Currently, XRP remains in a long-term value accumulation phase, and short-term fluctuations do not diminish its strategic position in the institutional blockchain race.