Stablecoin Payments Glossary
Escrow Payment
An escrow payment is a payment arrangement in which funds are placed under agreed control and released to the beneficiary only after specified conditions are met.
Explanation
Escrow can be administered by a trusted third party or implemented through smart-contract logic. Release conditions can include delivery confirmation, approval by both parties, passage of time, dispute resolution, or verified external data. Smart-contract escrow reduces some operational roles for an intermediary but still depends on the reliability of the code, any external data sources, and the legal treatment of the arrangement.
Why it matters
Escrow can reduce the risk that one party performs while the other fails to deliver, although dispute and oracle design remain important when conditions cannot be verified entirely on-chain.
Example
A buyer can deposit stablecoins into a smart contract that releases them to the seller after both parties approve delivery.
Related terms
Last reviewed: September 2026