Ripple CTO Says Institutions Can Move Value Without XRP or Any Crypto Asset on XRPL

The Ripple CTO has shared how institutions can use the XRP Ledger (XRPL) to transfer value without holding XRP, aside from paying transaction fees. 

David Schwartz made this disclosure on the back of a discussion started by Abdullah “Abs” Nassif, host of The Good Morning Crypto show. Notably, Abs highlighted a past comment from Schwartz, where he described XRP more as a weapon than simply a reserve. 

Institutions Can Transact on the XRPL Without XRP by Using Trustlines

Responding to this statement, Sean Langshaw, a former US Navy AC and full-stack developer, called attention to the XRPL’s documentation, explaining how the ledger allows two parties to create what are called “trustlines” without actually needing XRP besides for transaction cost.

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For the uninitiated, trustlines, which are native to the XRP Ledger, act like agreements between accounts on the network. Notably, when accounts set up trustlines among themselves, the trustlines specify which assets the accounts are willing to accept and in what amounts. 

Langshaw said that once institutions set up these trust relationships, they can issue and trade their own tokens without using XRP to settle payments. In these cases, XRP’s only role is in covering the small network fees that keep the XRPL running.

Ripple CTO Confirms This Has Been the Original Vision

In response to this, Schwartz confirmed that the situation actually matches the XRPL’s original vision, noting that he hopes institutions take this route. He said the trustline concept dates back to 2004, when Ryan Fugger first developed it, and it later became a key part of the Interledger Protocol (ILP), which links different payment networks. 

I really hope institutions do form trust relationships and leverage them. This was the original vision for trust lines (going back to 2004 and Ryan Fugger's work), the core concept behind ILP and I still think it's a huge win for everyone.

For those use cases where this is…

— David 'JoelKatz' Schwartz (@JoelKatz) August 14, 2025

Schwartz mentioned that for certain situations, trust relationships present a better solution than using cryptocurrencies directly. When that happens, people will naturally choose the method that works best. He added that this doesn’t threaten cryptocurrencies, because they still serve only a small part of their potential use cases today.

The Ripple CTO argued that even if trustlines work better for some problems, every increase in distributed ledger adoption strengthens the overall blockchain ecosystem. Schwartz explained that cryptocurrencies work best in cases where you need assets with no counterparty, no jurisdictional oversight, strong censorship resistance, and tolerance for volatility. 

According to him, the actual challenge is making it easy for the right people to access those assets when they need them. He also believes that being close to enterprise use cases will help drive that adoption.

The Parties Involved Can Decide Their Mode of Exchanging Value

To clarify his position, Schwartz presented an instance involving Alice and Bob, two parties with a trust relationship. These individuals might extend credit to each other and settle up weekly, or they might already have an open payment channel on the XRPL. 

Notably, every method Alice has to receive funds and every method Bob has to send the funds create part of a payment network. 

If Alice can take Bitcoin and Bob can hand out cash at his grocery store, the XRPL or ILP could handle a transaction where someone sends Bitcoin to Alice and gets cash from Bob. Essentially, the technology would manage the routing, pricing, settlement, and record-keeping.

Meanwhile, commenting on Schwartz’s disclosure, XRP community figure WrathofKahneman pointed out that XRP’s use will always depend on context. He noted that while trustlines can move value without XRP, they still rely entirely on the XRPL’s underlying infrastructure.