As blockchain adoption expands into institutional finance, ensuring secure, compliant, and controlled tokenized asset management is essential. To meet these needs, the Deep Freeze amendment (XLS-77d) has been proposed for the XRP Ledger (XRPL), providing issuers with a more robust tool to freeze assets at the account level while maintaining decentralization and transparency.
This blog explores how Deep Freeze enhances XRPL’s existing freeze functionality, why it’s a critical feature for institutional token issuers, and how validators can participate in the voting process.
What Is Deep Freeze?
Deep Freeze is an enhanced asset-freezing mechanism that enables token issuers to freeze all issued assets in a specific account at the protocol level. Unlike the existing trustline freeze, which only prevents further transactions, Deep Freeze restricts all outgoing transactions and prevents account holders from transferring assets entirely—offering a stronger level of control for compliance-driven use cases.
XRP Disclaimer
It’s important to note that Deep Freeze does not apply to XRP—the XRP Ledger’s native digital asset. Deep Freeze is designed exclusively for issued tokens and does not impact XRP balances or transactions in any way.
Why Is Deep Freeze Necessary?
Currently, issuers can freeze individual trustlines, preventing new transactions involving their issued assets. However, this has several limitations:
- Trustline Freeze is limited to individual assets – An issuer must freeze each asset on a per-user basis, making enforcement inefficient for large-scale compliance scenarios.
- Users can still transfer their remaining balances – While frozen trustlines prevent additional transactions, users can still hold and transfer already issued assets to others.
- Does not address high-risk compliance scenarios – Institutional issuers require a stronger freeze mechanism for situations involving sanctioned entities, fraud mitigation, or legal compliance.
Why This Matters for Institutional Issuers
For institutions leveraging XRPL to issue tokenized real-world assets (RWAs), stablecoins, or financial instruments, Deep Freeze ensures they can respond to regulatory requirements, security threats, or fraud cases similar to many other blockchains. It provides a compliance-friendly safeguard for central banks, payment providers, asset managers, and regulated financial institutions issuing assets on-chain.
Stablecoin issuers in particular are drawn to XRPL’s robust compliance features. Many stablecoins have launched on XRPL or are in the process of doing so, including those issued by Ripple (RLUSD), Societe Generale Forge (EURCV) and Braza Bank (BBRL). It would further benefit XRPL to attract major regulated stablecoin issuers such as Circle. Stablecoin issuers rely on being able to freeze send and receive functions to sanctioned addresses, in order to remain compliant and attractive to institutional users. DeepFreeze provides this ability, making it essential for institutional issuers on XRPL.
Use Cases for Deep Freeze
- Regulatory Compliance & Enforcement: Deep Freeze enables institutions to align with evolving regulatory frameworks by preventing asset transfers when required. If a regulator mandates a suspension of a specific account’s assets, issuers can enforce this with on-ledger transparency while ensuring compliance.
Fraud & Security Risk Mitigation: If an account is compromised or associated with fraudulent activity, issuers can quickly restrict asset movement, preventing unauthorized transactions and safeguarding the integrity of their tokenized assets.
Sanctions & Blacklisted Accounts: Governments and compliance bodies blacklist entities due to illicit activity, necessitating preventive measures for financial institutions. Deep Freeze allows swift action to block specific accounts from transferring issued tokens while maintaining full on-chain traceability.
Institutional Tokenization: Many financial institutions exploring tokenized deposits require built-in asset control mechanisms. Deep Freeze ensures central banks or authorized issuers can pause token transfers if necessary, helping bridge regulatory trust between blockchain technology and traditional finance.
How to Vote for the Deep Freeze Amendment
To support the adoption of Deep Freeze on the XRPL, you can participate in the amendment voting process!
Refer to the Amendments Guide for a step-by-step overview of how to vote.
New to XRPL? This guide also explains how the amendment process works and how you can contribute to the network’s evolution.
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