diff --git a/components/escrow/FiatXlmPreview.tsx b/components/escrow/FiatXlmPreview.tsx
index 11d76c8..26b2e58 100644
--- a/components/escrow/FiatXlmPreview.tsx
+++ b/components/escrow/FiatXlmPreview.tsx
@@ -15,15 +15,14 @@
 
 import React, { useEffect } from 'react';
 import {
-  AlertTriangle,
   AlertCircle,
   TrendingDown,
   TrendingUp,
   Loader2,
-  CheckCircle2,
 } from 'lucide-react';
 import { useFiatXlmSlippage } from '@/hooks/useFiatXlmSlippage';
 import { formatNgn } from '@/services/fxService';
+import { SlippageWarning } from '@/components/escrow/SlippageWarning';
 
 export interface FiatXlmPreviewProps {
   /** The XLM amount being paid */
@@ -184,67 +183,15 @@ export function FiatXlmPreview({
         )}
       </div>
 
-      {/* Warning Section — volatile slippage (>2%) */}
-      {slippage.isVolatile && !slippage.requiresAcknowledgment && (
-        <div
-          role="alert"
-          className="mb-4 flex gap-3 rounded-lg border border-amber-200 bg-amber-50 p-3 dark:border-amber-800 dark:bg-amber-900/20"
-        >
-          <AlertTriangle className="mt-0.5 h-5 w-5 flex-shrink-0 text-amber-600 dark:text-amber-500" aria-hidden="true" />
-          <div className="text-sm text-amber-800 dark:text-amber-200">
-            <p className="font-semibold">FX Rate Volatility Detected</p>
-            <p className="mt-1 text-xs">
-              The NGN/XLM rate has shifted{' '}
-              <span className="font-semibold">
-                {Math.abs(slippagePercent).toFixed(2)}%
-              </span>
-              {' '}since your quote. Please review the updated rate.
-            </p>
-          </div>
-        </div>
-      )}
-
-      {/* Critical Section — critical slippage (>5%) */}
-      {slippage.requiresAcknowledgment && (
-        <div
-          role="alert"
-          className="mb-4 flex gap-3 rounded-lg border border-red-200 bg-red-50 p-3 dark:border-red-800 dark:bg-red-900/20"
-        >
-          <AlertTriangle className="mt-0.5 h-5 w-5 flex-shrink-0 text-red-600 dark:text-red-400" aria-hidden="true" />
-          <div className="flex-1 text-sm text-red-800 dark:text-red-200">
-            <p className="font-semibold">⚠️ High FX Rate Volatility</p>
-            <p className="mt-1 text-xs">
-              The NGN/XLM rate has shifted more than{' '}
-              <span className="font-semibold">
-                {Math.abs(slippagePercent).toFixed(2)}%
-              </span>
-              . This is a significant change. You must acknowledge this volatility
-              before proceeding.
-            </p>
-
-            {/* Acknowledgment Checkbox */}
-            <div className="mt-3 flex items-start gap-2">
-              <input
-                id="volatility-ack"
-                type="checkbox"
-                checked={slippage.isAcknowledged}
-                onChange={(e) => slippage.setAcknowledged(e.target.checked)}
-                disabled={isSubmitting}
-                className="mt-1 h-4 w-4 cursor-pointer rounded border-gray-300 text-red-600 focus:ring-red-500 dark:border-gray-600 dark:bg-gray-800 disabled:cursor-not-allowed disabled:opacity-50"
-                aria-label="Acknowledge FX rate volatility"
-              />
-              <label
-                htmlFor="volatility-ack"
-                className={`text-xs cursor-pointer select-none ${
-                  isSubmitting ? 'cursor-not-allowed opacity-50' : ''
-                }`}
-              >
-                I acknowledge the rate volatility and accept the current rate
-              </label>
-            </div>
-          </div>
-        </div>
-      )}
+      {/* FX rate volatility warning — see SlippageWarning for the 2%/5% threshold UI */}
+      <SlippageWarning
+        slippagePercent={slippagePercent}
+        isVolatile={slippage.isVolatile}
+        requiresAcknowledgment={slippage.requiresAcknowledgment}
+        isAcknowledged={slippage.isAcknowledged}
+        onAcknowledgeChange={slippage.setAcknowledged}
+        isSubmitting={isSubmitting}
+      />
 
       {/* Loading State */}
       {slippage.isLoadingRate && (
@@ -254,14 +201,6 @@ export function FiatXlmPreview({
         </div>
       )}
 
-      {/* Success State */}
-      {slippage.isAcknowledged && slippage.requiresAcknowledgment && (
-        <div className="mb-4 flex items-center gap-2 rounded-lg bg-green-50 p-3 text-sm text-green-700 dark:bg-green-900/20 dark:text-green-400">
-          <CheckCircle2 className="h-4 w-4" aria-hidden="true" />
-          Volatility acknowledged. Ready to proceed.
-        </div>
-      )}
-
       {/* Action Buttons */}
       <div className="flex gap-3">
         <button
diff --git a/components/escrow/SlippageWarning.tsx b/components/escrow/SlippageWarning.tsx
new file mode 100644
index 0000000..7af995b
--- /dev/null
+++ b/components/escrow/SlippageWarning.tsx
@@ -0,0 +1,113 @@
+'use client';
+
+/**
+ * SlippageWarning — standalone FX rate volatility warning UI.
+ *
+ * Presentational component covering the three slippage states:
+ * - Volatile (>2%): non-blocking advisory banner.
+ * - Critical (>5%): blocking banner with a required acknowledgment checkbox.
+ * - Acknowledged: confirmation that the user accepted the critical variance.
+ *
+ * Kept separate from FiatXlmPreview so any escrow flow that quotes a
+ * fiat/XLM rate can reuse the same warning UI and thresholds.
+ *
+ * Architecture: SlippageWarning (Component) → useFiatXlmSlippage (Hook) →
+ *              fiatXlmSlippageService → fxService → Backend
+ */
+
+import React from 'react';
+import { AlertTriangle, CheckCircle2 } from 'lucide-react';
+
+export interface SlippageWarningProps {
+  /** Percentage change of the current rate against the quoted rate */
+  slippagePercent: number;
+  /** True if slippage magnitude exceeds the 2% volatility threshold */
+  isVolatile: boolean;
+  /** True if slippage magnitude exceeds the 5% critical threshold */
+  requiresAcknowledgment: boolean;
+  /** Whether the user has ticked the acknowledgment checkbox */
+  isAcknowledged: boolean;
+  /** Called with the new checked state when the checkbox is toggled */
+  onAcknowledgeChange: (acknowledged: boolean) => void;
+  /** Disables the checkbox while a submission is in flight */
+  isSubmitting?: boolean;
+}
+
+export function SlippageWarning({
+  slippagePercent,
+  isVolatile,
+  requiresAcknowledgment,
+  isAcknowledged,
+  onAcknowledgeChange,
+  isSubmitting = false,
+}: SlippageWarningProps) {
+  if (!isVolatile && !requiresAcknowledgment) {
+    return null;
+  }
+
+  const magnitude = Math.abs(slippagePercent).toFixed(2);
+
+  if (requiresAcknowledgment) {
+    return (
+      <div
+        role="alert"
+        className="mb-4 flex gap-3 rounded-lg border border-red-200 bg-red-50 p-3 dark:border-red-800 dark:bg-red-900/20"
+      >
+        <AlertTriangle className="mt-0.5 h-5 w-5 flex-shrink-0 text-red-600 dark:text-red-400" aria-hidden="true" />
+        <div className="flex-1 text-sm text-red-800 dark:text-red-200">
+          <p className="font-semibold">High FX Rate Volatility</p>
+          <p className="mt-1 text-xs">
+            The NGN/XLM rate has shifted more than{' '}
+            <span className="font-semibold">{magnitude}%</span>. This is a
+            significant change. You must acknowledge this volatility before
+            proceeding.
+          </p>
+
+          <div className="mt-3 flex items-start gap-2">
+            <input
+              id="volatility-ack"
+              type="checkbox"
+              checked={isAcknowledged}
+              onChange={(e) => onAcknowledgeChange(e.target.checked)}
+              disabled={isSubmitting}
+              className="mt-1 h-4 w-4 cursor-pointer rounded border-gray-300 text-red-600 focus:ring-red-500 dark:border-gray-600 dark:bg-gray-800 disabled:cursor-not-allowed disabled:opacity-50"
+              aria-label="Acknowledge FX rate volatility"
+            />
+            <label
+              htmlFor="volatility-ack"
+              className={`text-xs cursor-pointer select-none ${
+                isSubmitting ? 'cursor-not-allowed opacity-50' : ''
+              }`}
+            >
+              I acknowledge the rate volatility and accept the current rate
+            </label>
+          </div>
+
+          {isAcknowledged && (
+            <div className="mt-3 flex items-center gap-2 text-green-700 dark:text-green-400">
+              <CheckCircle2 className="h-4 w-4" aria-hidden="true" />
+              Volatility acknowledged. Ready to proceed.
+            </div>
+          )}
+        </div>
+      </div>
+    );
+  }
+
+  return (
+    <div
+      role="alert"
+      className="mb-4 flex gap-3 rounded-lg border border-amber-200 bg-amber-50 p-3 dark:border-amber-800 dark:bg-amber-900/20"
+    >
+      <AlertTriangle className="mt-0.5 h-5 w-5 flex-shrink-0 text-amber-600 dark:text-amber-500" aria-hidden="true" />
+      <div className="text-sm text-amber-800 dark:text-amber-200">
+        <p className="font-semibold">FX Rate Volatility Detected</p>
+        <p className="mt-1 text-xs">
+          The NGN/XLM rate has shifted{' '}
+          <span className="font-semibold">{magnitude}%</span> since your
+          quote. Please review the updated rate.
+        </p>
+      </div>
+    </div>
+  );
+}
diff --git a/components/escrow/__tests__/SlippageWarning.test.tsx b/components/escrow/__tests__/SlippageWarning.test.tsx
new file mode 100644
index 0000000..69a4edb
--- /dev/null
+++ b/components/escrow/__tests__/SlippageWarning.test.tsx
@@ -0,0 +1,111 @@
+/**
+ * Tests for SlippageWarning
+ *
+ * Covers:
+ * - No render when slippage is within normal range
+ * - Advisory banner for volatile slippage (>2%)
+ * - Blocking banner + checkbox for critical slippage (>5%)
+ * - Acknowledgment callback wiring
+ * - Success state once acknowledged
+ */
+
+import React from 'react';
+import { render, screen, fireEvent } from '@testing-library/react';
+import { SlippageWarning } from '@/components/escrow/SlippageWarning';
+
+describe('SlippageWarning', () => {
+  it('renders nothing when slippage is within the normal range', () => {
+    render(
+      <SlippageWarning
+        slippagePercent={0.5}
+        isVolatile={false}
+        requiresAcknowledgment={false}
+        isAcknowledged={false}
+        onAcknowledgeChange={jest.fn()}
+      />
+    );
+
+    expect(screen.queryByRole('alert')).not.toBeInTheDocument();
+  });
+
+  it('shows the volatility advisory banner when slippage exceeds 2% but not 5%', () => {
+    render(
+      <SlippageWarning
+        slippagePercent={3.14}
+        isVolatile={true}
+        requiresAcknowledgment={false}
+        isAcknowledged={false}
+        onAcknowledgeChange={jest.fn()}
+      />
+    );
+
+    expect(screen.getByRole('alert')).toBeInTheDocument();
+    expect(screen.getByText(/FX Rate Volatility Detected/i)).toBeInTheDocument();
+    expect(screen.getByText(/3\.14%/)).toBeInTheDocument();
+    expect(screen.queryByRole('checkbox')).not.toBeInTheDocument();
+  });
+
+  it('shows the blocking critical banner with a checkbox when slippage exceeds 5%', () => {
+    render(
+      <SlippageWarning
+        slippagePercent={6.2}
+        isVolatile={true}
+        requiresAcknowledgment={true}
+        isAcknowledged={false}
+        onAcknowledgeChange={jest.fn()}
+      />
+    );
+
+    expect(screen.getByRole('alert')).toBeInTheDocument();
+    expect(screen.getByText(/High FX Rate Volatility/i)).toBeInTheDocument();
+    const checkbox = screen.getByRole('checkbox') as HTMLInputElement;
+    expect(checkbox).toBeInTheDocument();
+    expect(checkbox.checked).toBe(false);
+  });
+
+  it('invokes onAcknowledgeChange with the new checked state when toggled', () => {
+    const onAcknowledgeChange = jest.fn();
+    render(
+      <SlippageWarning
+        slippagePercent={6.2}
+        isVolatile={true}
+        requiresAcknowledgment={true}
+        isAcknowledged={false}
+        onAcknowledgeChange={onAcknowledgeChange}
+      />
+    );
+
+    fireEvent.click(screen.getByRole('checkbox'));
+
+    expect(onAcknowledgeChange).toHaveBeenCalledWith(true);
+  });
+
+  it('disables the checkbox while a submission is in flight', () => {
+    render(
+      <SlippageWarning
+        slippagePercent={6.2}
+        isVolatile={true}
+        requiresAcknowledgment={true}
+        isAcknowledged={false}
+        onAcknowledgeChange={jest.fn()}
+        isSubmitting={true}
+      />
+    );
+
+    expect(screen.getByRole('checkbox')).toBeDisabled();
+  });
+
+  it('shows the acknowledged confirmation once the checkbox is checked', () => {
+    render(
+      <SlippageWarning
+        slippagePercent={6.2}
+        isVolatile={true}
+        requiresAcknowledgment={true}
+        isAcknowledged={true}
+        onAcknowledgeChange={jest.fn()}
+      />
+    );
+
+    expect(screen.getByText(/Volatility acknowledged/i)).toBeInTheDocument();
+  });
+});