There is thus an opportunity for standards, a need for federation, and a need to make it easy for big players to offer liquidity.
As far as I understand, e.g. Ripple and Stellar solve basically exactly the 24x7x365 RTGS problem that FedNow intends to solve; and, they allow all sorts of assets to be plugged into the network. Could FedNow just use a different UNL (Unique Node List) with participating banks operating trusted validators and/or offering liquidity ("liquidity provisioning")?
Notably, Ripple is specifically positioned to do international interbank real time gross settlement (RTGS) and remittances. Ripple could integrate with FedNow directly. Most efficiently, if it complies with KYC/AML requirements, FedNow could operate an XRP Ledger. Or, each bank could operate XRP Ledgers.
Getting thousands of banks to comply with an evolving API / EDI spec is no small task. Blockchain solutions require API compliance, have solutions for governance where there are a number of stakeholders seeking to reach consensus, and lack single points of failure.
Here's to hoping that we've learned something about decentralizing distributed systems for resiliency.
>> In contrast, the XRP Ledger requires 80 percent of validators on the entire network, over a two-week period, to continuously support a change before it is applied. Of the approximately 150 validators today, Ripple runs only 10. Unlike Bitcoin and Ethereum — where one miner could have 51 percent of the hashing power — each Ripple validator only has one vote in support of an exchange or ordering a transaction.
So, you want to get banks onboard with only one s'coin USD stablecoin; but you don't want to deal with exchanges or FOREX or anything because that's a different thing? And, this is not just yet another ACH with lower clearance time?
> Interledger Architecture
> Interledger provides for secure payments across multiple assets on different ledgers. The architecture consists of a conceptual model for interledger payments, a mechanism for securing payments, and a suite of protocols that implement this design.
> The Interledger Protocol (ILP) is the core of the Interledger protocol suite. Colloquially, the whole Interledger stack is sometimes referred to as "ILP". Technically, however, the Interledger Protocol is only one layer in the stack.
> Interledger is not a blockchain, a token, nor a central service. Interledger is a standard way of bridging financial systems. The Interledger architecture is heavily inspired by the Internet architecture described in RFC 1122, RFC 1123 and RFC 1009.
> You can envision the Interledger as a graph where the points are individual nodes and the edges are accounts between two parties. Parties with only one account can send or receive through the party on the other side of that account. Parties with two or more accounts are connectors, who can facilitate payments to or from anyone they're connected to.
> Connectors provide a service of forwarding packets and relaying money, and they take on some risk when they do so. In exchange, connectors can charge fees and derive a profit from these services. In the open network of the Interledger, connectors are expected to compete among one another to offer the best balance of speed, reliability, coverage, and cost.
Why should we prefer an immutable, cryptographically-signed blockchain solution over SQL/BigTable/MQ for FedNow?
Blockchain and payments standards:
... Here's the notice and request for comment PDF: "Docket No. OP – 1670:
Federal Reserve Actions to Support Interbank Settlement of Faster Payments"
"Federal Reserve announces plan to develop a new round-the-clock real-time payment and settlement service to support faster payments"