**Ripple CTO David Schwartz Addresses Questions About XRP and the XRP Ledger**
Recently, Ripple CTO David Schwartz responded to a question from Matthew Sigel, VanEck’s head of digital assets research, concerning XRP and how the XRP Ledger operates. Sigel asked, “If XRP holders aren’t earning anything from the ecosystem, and the protocol doesn’t accrue value, who’s the one collecting the tax?” This question came after Sigel had challenged the XRP community by inquiring about the utility of the XRP Ledger blockchain.
In his response, Schwartz said, “You asked what the blockchain actually did. You got an answer. Your response was that you couldn’t get passive income from it. Is the blockchain ethos ‘no middlemen, be your own bank’ or is it ‘if I can’t tax other people for a passive profit, I don’t care about it?’”
Acknowledging Schwartz’s point, Sigel followed up by asking who collects the tax if XRP holders do not earn anything from the ecosystem and the protocol does not accrue value.
Schwartz clarified that there is essentially no tax on the XRP Ledger. He explained that XRP can be used to issue assets, trade them, create NFTs, make payments, and more, highlighting the ledger’s broad utility.
### Transaction Fees and Deflationary Pressure
The closest concept to a tax on the XRP Ledger comes from transaction fees and reserves, which primarily serve as anti-spam measures. These transaction fees are systematically burned on the network, creating deflationary pressure on the total supply of 100 billion XRP. To date, over 14 million XRP (14,241,275 XRP) have been burned.
This burn rate remains relatively low due to the XRP Ledger’s minimal transaction fees, which are less than $0.003 per transaction.
### XRP Ledger as a Public Good
Schwartz described the XRP Ledger as a public good that belongs to everyone. He emphasized, “Nobody has any special right to charge you for it. It is in no sense owned or controlled by XRP holders.”
In conclusion, he stated plainly, “Holding XRP gives you XRP. Full stop.”
This perspective underscores Ripple’s vision of the XRP Ledger as an open, decentralized platform with practical use cases beyond merely generating passive income for holders.
https://bitcoinethereumnews.com/tech/tax-free-xrp-ripple-cto-confirms-no-tax-on-xrp-ledger/
