Ripple CTO Explained Why He Will Never Pay Banks to Use XRP

• Schwartz rejected artificial incentives, saying XRP should be used only when it’s the best option.
• He warned subsidies can mask weak demand, using Uber as a cautionary example.
• Ripple prefers reducing friction and supporting early adoption over paying for usage.

Ripple CTO David Schwartz pushed back against the idea of incentivizing banks to use XRP. Responding to a community discussion, Schwartz said XRP should only be used when it is the best option, not because institutions are offered artificial discounts.

Ripple CTO Explains Why Incentives Shouldn’t Drive XRP Adoption

The discussion began when a user suggested offering discounts to banks that choose XRP for settlements. Since Ripple Payments does not require institutions to hold or use XRP, the idea was that cheaper pricing could encourage adoption. 

This proposal reflects a long-standing debate within the XRP community about whether incentives should be used to increase usage.

Ripple CTO David Schwartz responded with a balanced view. He said he is not completely against discounts, but he opposes artificial incentives that push institutions to use XRP even when it is not the best option. According to Schwartz, such incentives can create temporary demand and make it harder to judge real product-market fit.

To explain his concern, Schwartz pointed to Uber as an example. He said if users rely on heavy subsidies, they may stop using the service once prices return to normal. In that case, adoption is not driven by value but by incentives. Schwartz warned that the same risk applies if XRP adoption depends on discounts.

Bitcoin’s Decentralization Got Pulled Into the Thread Too

Schwartz did not stop at XRP. A separate reply took direct aim at one of crypto’s most sacred assumptions.

“Bitcoin’s decentralization doesn’t come from its use of PoW,” he wrote. “Rather, PoW is a centralizing force bitcoin has to keep fighting against.”

He pointed to the mining algorithm debate as the perfect illustration of an impossible bind. Change the algorithm, and you prove the community can alter anything it dislikes, destroying any guarantee of immutability. 

Leave it unchanged, and you prove that security rests largely on trusting one dominant party not to act against its own interests.

Related: XRP Faces Downside Risk as Analysts Warn of Drop to $0.80