David Schwartz Just Shut Down the Biggest XRP Doubt

David Schwartz, Ripple’s former chief technology officer, believes strong adoption of the XRP Ledger (XRPL) in financial applications would likely increase demand for XRP and support its value.

His position centers on how XRP functions within the network, including its role in payments, liquidity, transaction fees, and account reserves.

In a post on X, Schwartz explained why he considers it unlikely that the ledger could achieve significant financial success while XRP experiences little demand. He identified a global financial system dominated by a single settlement asset as one possible exception, but said he considers that outcome unlikely.

I think a world where XRPL is highly successful in financial applications but XRP does not have high demand and value is very unlikely. About the only way that could happen would be if we wound up in a world with one totally dominant settlement asset. That seems unlikely to me.

Link Between XRPL Adoption and XRP Demand

Schwartz’s comments followed a discussion about whether the XRP Ledger’s success would necessarily translate into higher demand for XRP. The conversation examined the difference between XRP’s direct effects on price and the indirect benefits that greater network adoption could generate.

He noted that higher transaction fees would burn XRP more quickly but would also worsen the user experience. Instead, the network keeps fees low to support usability while maintaining protection against spam transactions.

Schwartz responded by explaining how this design could benefit both the ledger and its associated digital asset.

“The thesis is this: Low fees and reliable operation make XRPL a great place to move and hold value. That drives value flow to XRPL. XRP captures some of that value because of its unique advantages over other assets on XRPL,” he wrote.

His explanation connects network activity with potential demand for XRP. As more financial applications use XRPL to transfer and hold value, XRP could benefit from its specific functions within the network.

XRP’s Utility Extends Beyond Transaction Fees

The discussion also examined whether XRP’s role in transaction fees and account reserves directly affects its market price.

Saul suggested that XRP’s use as a liquidity bridge through automated market maker and order book routing, commonly called autobridging, could provide a more direct connection between utility and price. He described the effects of transaction fees and reserves as having limited direct price impact, while potentially supporting demand indirectly through market expectations.

Schwartz agreed that liquidity bridging represents one example of the mechanism but added that XRP has other advantages on the ledger.

He explained that XRP is the only counterparty-free asset that every account can accept on XRPL. Accounts also need to hold XRP to pay transaction fees. These characteristics could contribute to demand as activity on the network increases.

The distinction matters because successful financial applications do not automatically guarantee higher asset prices. Demand also depends on how applications use the asset and whether competing assets can perform similar functions.

Why Schwartz Considers Weak XRP Demand Unlikely

Schwartz concluded that a successful XRPL ecosystem with little demand for XRP would be unlikely unless the world adopted one overwhelmingly dominant settlement asset.

“I think a world where XRPL is highly successful in financial applications but XRP does not have high demand and value is very unlikely,” he wrote.

His assessment reflects the possibility that XRP could benefit from several functions across a growing financial ecosystem rather than relying solely on transaction fees or token burns.

However, Schwartz’s comments describe a potential relationship between adoption and demand, not a guaranteed price outcome. XRP’s future value would still depend on actual usage, liquidity requirements, competition, and market conditions.