Ripple’s David Schwartz Says XRP Could Benefit Even if Bitcoin Dominates Settlement
Ripple CTO Emeritus David Schwartz argues that XRP could still have a role on the XRP Ledger even if Bitcoin became the leading settlement asset. His case depends on XRPL attracting real financial activity and XRP being used to connect assets on the ledger.
- XRP’s value case depends on network use, not fee burns alone.
- Schwartz sees XRP bridging trading pairs, including between Bitcoin representations on XRPL.
- Whether that activity would create lasting, meaningful demand remains unproven.
From fee burns to network utility
The debate on X started with a familiar question: does burning transaction fees help support a token’s price? XRP commentator Saul argued that XRPL burns fees instead of paying them to validators, and that this has little direct effect on XRP’s market value. Another user pushed back, calling the burn a deliberate design choice and accusing Saul of misunderstanding the ledger.
Schwartz shifted the focus from the burn to the activity it might support. Low fees and reliable operation, he argued, could make XRPL useful for moving and storing value. If financial applications take hold on the ledger, XRP could benefit from its role in those activities.
That’s an argument for utility, not proof that fee burning will drive appreciation. The burned fees reduce XRP supply by the amount destroyed, but the discussion included no figures on fee burns or their measurable effect on supply or price.
How XRP could be used on XRPL
Schwartz pointed to three possible sources of utility. First, XRPL’s auto-bridging can use XRP as an intermediary when users trade between other assets on the ledger. This may help connect trading pairs, but the value captured depends on whether traders use that route and how much liquidity and volume it attracts.
Second, XRP is XRPL’s native asset. Unlike an issued token, it does not rely on an issuer to create or redeem it. An XRPL account can also receive XRP without first establishing a relationship with a token issuer. That may make XRP convenient on the ledger, but it does not, on its own, establish substantial demand.
Third, users need XRP to pay XRPL transaction fees, which are burned rather than paid to validators. These payments give XRP a use, but they do not create a recurring revenue stream for token holders. Any resulting demand depends on how much the network is used.
Schwartz called it “very unlikely” that XRPL could succeed in financial applications while XRP saw little demand. That is his assessment, not a quantified forecast. XRP used as a trading intermediary may be held only briefly, so trading activity does not automatically lead to large or lasting holdings.
What XRP’s role could be if Bitcoin dominates
Bitcoin becoming the dominant settlement asset would not necessarily mean that every network has only one version of Bitcoin. Schwartz’s hypothetical allows for multiple wrapped or bridged representations of BTC on XRPL. A wrapped asset represents an asset from another network. It is not Bitcoin itself, and its reliability depends on how it is issued and secured.
In this scenario, XRP’s proposed role would be to facilitate trading between those representations on XRPL, not necessarily to move Bitcoin onto the ledger or secure the wrapping process.
Schwartz wrote: “Even if you imagine a world where nearly all settlement is done using bitcoin, ” and later, “and XRP will capture value bridging them.”
The distinction matters. Bitcoin could dominate settlement while multiple representations still circulate, leaving room for trading between them. But if one representation became so dominant that users had little reason to trade between versions, the bridging role Schwartz describes could weaken. He called a world with one completely dominant settlement asset unlikely, but did not define what “completely dominant” would mean.
What would show that the thesis is working?
The key test is not whether XRP has a technical role on XRPL. It is whether people use the ledger in ways that require XRP. Useful evidence would include sustained financial activity, XRP-denominated liquidity, trading volume that uses XRP as an intermediary, and data on fee burns. The exchange provided no quantitative estimates for these measures.
Wrapped Bitcoin raises more questions: who issues each representation, how it is secured, and whether users trust it enough to trade. A bridge is useful only when there is demand to cross it and the assets on both sides are credible.
Schwartz offers a plausible way for XRP to retain utility even in a Bitcoin-led settlement system. But a possible role does not guarantee that XRP will capture value. Until measurable activity shows that XRPL use creates meaningful demand for XRP, the thesis remains something to test, not a reason to assume a price outcome. See also Schwartz’s response to XRP Ledger centralization criticism and his denial of XRP Ledger manipulation.
Key questions and answers
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Why does Schwartz think XRP could benefit if XRPL succeeds?
XRP is XRPL’s native asset, is required for transaction fees, and can serve as an intermediary between trading pairs. These functions create potential uses, but whether they lead to lasting demand depends on actual network activity.
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Could XRP have a role if Bitcoin dominated settlement?
In Schwartz’s hypothetical, XRP could help users trade between multiple wrapped or bridged Bitcoin representations on XRPL. Those representations would carry their own issuer or bridge risks.
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Does burning XRPL fees prove XRP should rise in value?
No. Fees are burned, but the amount burned and its measurable effect on XRP’s supply or market price were not quantified.
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What is the biggest uncertainty in Schwartz’s case?
Whether XRPL will attract sustained financial activity that creates meaningful demand for XRP, rather than brief or limited use.
