Ripple's Chief Technology Officer, David Schwartz, has strongly criticized former U.S. President Donald Trump's recent proposal to replace the income tax with increased tariffs. Schwartz believes that this move could lead to the downfall of the U.S. Dollar (USD), which is the backbone of the country's global dominance.

Trump's proposal, presented during separate meetings with House and Senate Republicans, aims to reduce the tax burden on American citizens by shifting it to foreign companies and governments through higher tariffs on imported goods. This suggestion has sparked significant debate among lawmakers and economic experts, with many raising concerns about the potential negative impacts on the U.S. economy.

Schwartz's response to the proposal was unequivocal. He explained that taxes create a demand for the U.S. dollar, and without this demand, the currency could rapidly become worthless. The Ripple CTO compared the government to a tech company and the economy to its users, stating that the government needs to demonstrate its ability to monetize its users (the economy) or risk collapsing like an "overvalued house of cards."

Schwartz's warning highlights the essential role of taxes in maintaining the value of a currency. By ensuring demand for the U.S. dollar through taxation, the government supports the currency's stability. Without this mechanism, the economic structure could face severe instability, potentially leading to a devaluation of the dollar and de-dollarization, ultimately weakening the United States' position on the global stage.

The debate surrounding Trump's proposal underscores the complex and delicate balance between taxation, economic policy, and the preservation of a nation's currency. As the 2024 presidential election approaches, the implications of such proposals will undoubtedly be a key focus of discussion and scrutiny.