XRPL Developers Close Gaps Around Restricted Tokens

The code changes are meant to tighten controls around trust lines and AMM pools, especially for regulated assets like stablecoins and tokenized funds. The upgrade is not live on mainnet yet.

• Regulation
• Blockchain
• Stablecoin
• Ripple
• Altcoins

Key Takeaways

• XRP Ledger developers are working on four code changes meant to block unauthorized accounts from holding restricted tokens.
• The fixCleanup3_5_0 upgrade is not live on mainnet yet and first needs broad support from validators.
• The changes are meant to enforce approval for trust lines and trading pools with regulated tokens.

Developers of the XRP Ledger are working on four code changes meant to stop unauthorized accounts from holding restricted tokens. The changes have been bundled into a network upgrade called fixCleanup3_5_0, but it is not live on mainnet yet.

What Changes

On the XRP Ledger, some tokens are meant only for accounts that the issuer has approved in advance. That applies, for example, to regulated assets like stablecoins or tokenized funds, where an identity check can happen first. That approval runs through the trust line, the connection an XRP Ledger account uses to hold a token from another issuer.

One of the proposals makes approval mandatory for both tokens in a trading pool before an account can join it. These pools are called automated market makers and trade tokens automatically. Another proposal closes a loophole where the approval check only applied to trust lines with a zero balance. That meant an existing trust line with tokens could sometimes still receive more.

Why This Matters

For European crypto readers, this is especially relevant because it shows how stricter access rules on a blockchain are enforced in practice. These features matter for issuers of regulated tokens, but also for parties working with identity checks and compliance. The XRP Ledger Foundation says no users were affected by these changes.

The same mix of accessibility and compliance is also becoming more important for banks offering crypto, because regulated products only work if the underlying infrastructure can enforce strict access rules.

No Launch Yet

The four changes have not yet been merged into the XRP Ledger's main software. Even after that, support from more than 80 percent of trusted validators is still needed, and that for two weeks in a row, before fixCleanup3_5_0 is activated.