Ripple CTO David Schwartz answered recent questions about how XRP and the XRP Ledger work.
The question posed by Matthew Sigel, Head of Digital Asset Research at VanEck, was: “If XRP holders earn nothing from the ecosystem and the protocol creates no value, who collects the taxes?”
Sigel had already joined the XRP community for the utility of the XRP Ledger blockchain.
To which Ripple’s CTO responded, “You asked what blockchain actually does. You got the answer. Your answer was that you can’t make passive income from blockchain. Is the blockchain ethos of ‘cut out the middleman and be your own bank’ or ‘if you can’t tax others for passive profits, I don’t care’?”
Acknowledging Schwartz’s answer, Siegel also asked further questions about who will collect taxes if XRP holders earn nothing from the ecosystem and the protocol does not create value.
There are really no taxes. XRP can be used to issue assets, trade, issue NFTs, make payments, and more. The closest thing to taxes are transaction fees and reserves that act as anti-spam protection. The ledger is a public good that belongs to everyone. no one has…
— David ‘JoelKatz’ Schwartz (@JoelKatz) November 14, 2025
To this, the Ripple CTO responded that the XRP ledger is actually tax-free because XRP can be used to issue assets, trade, issue NFTs, make payments, etc.
Ripple CTO: Hold XRP and get XRP
Schwartz explained that the closest thing to taxes on XRPL are transaction fees and reserves that act as anti-spam protection. Transaction fees are being systematically burned on the XRP Ledger, putting deflationary pressure on the total supply of 100 billion XRP, with a total of 14,241,275 XRP currently being burned. This low burn rate is due to relatively low transaction fees on the network (less than $0.003 per transaction).
The Ripple CTO described the XRP ledger as a public good that belongs to everyone, adding, “No one has a special right to charge you a fee. It is in no way owned or controlled by XRP holders,” adding, “Hold XRP, get XRP. Full stop.”
