Escrow

Escrow locks XRP — and, when the issuer allows it, some issued tokens — until a time, or until a condition is met, and then either finishes the payment or returns it. The ledger holds the rules. A person does not hold the coins in a pocket in between.

“The money is in escrow” in a chat can mean anything. On a ledger, escrow is a specific object you can look up: who locked it, who can finish it, and when it can return.

Someone locks XRP into an escrow object. A finish-after time says the soonest it can be completed. A cancel-after time says when the sender can take it back if it was never finished. If the escrow was created with a crypto-condition, the finisher must also supply the matching fulfillment, a secret revealed at the right moment.

Until one of those paths runs, the XRP is not in the destination’s free balance. It is in the escrow. You can see that object on an explorer. If you cannot find it, the chat’s “escrow” is just a word.

Real example: the XRP Ledger’s escrow can pay a destination after a time without a middleman holding the keys. XRP can be escrowed, and some issued tokens can too when the issuer has allowed it. The create, finish, and cancel steps are all transactions. Source: Escrow.