David “JoelKatz” Schwartz, Chief Technology Officer at Ripple, has once again made it clear: XRP is not Ripple’s “bank account”, but rather a strategic weapon in the company’s mission to revolutionize global payments.
Speaking through comments resurfaced by the Good Morning Crypto channel, Schwartz revisited the long-standing debate on XRP’s role and the flexibility of the XRP Ledger (XRPL). The discussion reignited on August 14, 2025, after a user pointed out that XRPL’s trustline system allows institutions to transact without holding significant amounts of XRP.
Trustlines – The Backbone of Flexible Payments
Trustlines, a concept dating back to Ryan Fugger’s 2004 work that inspired XRPL and the Interledger Protocol (ILP), are credit arrangements between accounts. They allow token transfers with only minimal XRP to cover transaction fees.
“I really hope institutions do form trust relationships and leverage them,” Schwartz said, calling it a “huge win for everyone” when such arrangements provide a better fit than cryptocurrency-based settlement.
Beyond Cryptocurrency-Only Solutions
Schwartz stressed that digital assets without counterparties or jurisdiction are best reserved for cases where those traits offer real advantages. He believes blockchains will grow more valuable by integrating tools beyond pure crypto transfers.
A Practical Example
He illustrated the point with a scenario: if “Alice” accepts Bitcoin and “Bob” prefers cash, XRPL or ILP can still connect them — handling discovery, quoting, atomic settlement, and accounting while converting between assets.
This perspective reaffirms Ripple’s dual strategy: leveraging XRP where it’s most effective, while enabling flexible, interoperable payment solutions across global markets.
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