David “JoelKatz” Schwartz, the Chief Technology Officer of Ripple continues to stay firm on his opinion that XRP is not meant to function as a “bank account” for Ripple, but rather as a “strategic weapon” in the company’s mission to improve global payments.
His remarks surfaced this week by the Good Morning crypto channel, sparking a debate over XRP’s role and the flexibility of the XRP Ledger (XRPL). On August 14, 2025 the statement, originally made years ago, came back into focus, after a user raised the point that trust relationships on XRPL allow institutions to transact without necessarily holding XRP.
These trustlines, credit arrangements between accounts and the ledger enable token transfers with only minimal XRP needed to cover transaction fee.
Schwartz embraced the point, noting that the idea of truslines goes back to 2004 and Ryan Fugger’s early work that laid the foundation for XRPL and Interledger Protocol (ILP).
“I really hope institutions do form trust relationships and leverage them.” Schwartz wrote, calling such arrangements a “ huge win for everyone,” when they offer a better fit than cryptocurrency based settlement.
He was quick to stress that digital assets without counterparties, without jurisdiction should only be used for the use case where those things are truly advantages. He further explained that Blockchains will become more valuable as they integrate solutions that go beyond what cryptocurrencies alone can offer.
To illustrate the concept, Schwartz described a scenario where two entities, “Alice” and “ Bob” extend credit to one another and settle over a certain time period. Even if one accepts bitcoin and the other deals in cash, XRPL or ILP could bridge the gap, converting between the asset while handling discovery, quoting, atomic settlement, and accounting.
Also Read: XRP Ledger Ethereum Sidechain Targets Developer Growth: Ripple CTO
