Tax-Free XRP? Ripple CTO Confirms No Tax on XRP Ledger

Ripple CTO David Schwartz addressed a recent question regarding XRP and how the XRP Ledger works.

The question posed by Matthew Sigel, VanEck’s head of digital asset research, was “If XRP holders do not earn anything from the ecosystem, and the protocol does not accumulate value, who is the one who collects the tax?”

Sigel had already taken the XRP community asking the utility of the XRP Ledger blockchain.

The Ripple CTO responded to this, answering: “You asked what the blockchain really did. You have an answer. Your answer was that you could not get a passive income from it. Is the ethos of blockchain “no middlemen, be your own bank” or is it “if I can’t tax other people for a passive profit, I don’t care?”

I recognize her by Schwartz response, Sigel asked more about who collects the tax if XRP holders do not earn anything from the ecosystem and the protocol has no value.

To this, Ripple’s CTO replied that there really is no tax XRP Ledger as XRP can be used to issue assets, exchange, issue NFT, make payments, among other things.

Ripple CTO: Holding XRP gives you XRP

Schwartz explained that the closest thing to a tribute XRPL it is transaction fees and reserves that serve as an anti-spam measure. Transaction fees are systematically burned onto the XRP Ledger, putting deflationary pressure on the total supply of 100 billion XRP, with 14,241,275 XRP now burned in total. This low burn rate is due to the relatively low transaction fees (less than $0.003 per transaction) in the network.

The Ripple CTO described the XRP Ledger as a public good that belongs to everyone, adding: “No one has any special right to charge for it. It is not in any sense owned or controlled by the holders of XRP”, and saying: “Holding XRP gives you XRP. Full stop”.