Ripple CTO David Schwartz recently discussed XRP, RLUSD and XRP Ledger networks and participated in conversations about X.
X users were asking how trust relationships are created between entities and associated tokens, as outlined in the XRPL documentation. X users explained the scenarios where XRP is only needed for transaction fees, and where the institution can create trustworthy relationships. In other words, you don’t need to trade with XRP.
In response to user questions, Schwartz emphasized his support for institutions that form and utilize trust. He added that this is the original vision of Trust Lines and the core concept behind ILP. He believes this is a big win for everyone.
I really hope that institutions form trust and use them. This was the first vision of Trust Lines (going back to 2004 and back to Ryan Fugger’s work), the core concept behind ILP. I think this is a big win for everyone.
This is…
– David ‘Joelkatz’ Schwartz (@Joelkatz) August 14, 2025
To make it a context, the trustline is a ledger object that requires 0.2 XRP spares each. An approved trust line listed on XRP Ledger allows the issuer to create tokens that can only be held by accounts that the issuer is specifically authorized to.
Ripple’s Interdger Protocol (ILP) is an open source protocol for sending international payments. It works by connecting different payment providers (such as banks and cryptocurrencies) to allow you to resolve transactions between them.
The core ideas of trust relationships explained
Schwartz continued to explain the core ideas of trust using simple illustrations. “Imagine there are two entities that have some kind of trust with each other. One may already owe the other money. They expand their achievements to each other and resolve them weekly.
According to Ripple CTO, in theory, any means by which either party can receive and send money can be considered a payment network.
“Alice and Bob expand their credits to each other each week and settle down each week. Alice can accept Bitcoin on the Bitcoin blockchain, and Bob can pass the counter at the grocery store. You can pay Bitcoin to Alice using XRPL or ILP and convert it to cash using Bitcoin by earning cash from Bob. I explained.
