Why do you think that a decentralized backbone is the best outcome?

I can understand that there are multiple scenarios where a decentralized cryptocurrency has some advantages for a direct end-user, and some market failures where customers can't get appropriate payment services; however for the "institution-to-institution" backbone I see no advantages whatsoever, the settlement channels which financial institutions can use are quite good and fit the needs of these institutions much better than (for example) Bitcoin; the interbank settlement systems are fast, cheap, reliable, secure, already implemented and tested, work on a large scale and they don't really have a trust issue with their operators.

There are many flaws in worldwide payment systems available to customers, but the backbone between institutions is not one of them.

Good question! The most important aspect of this re-org is that people can choose to take part of the system without a bank, or both. There are many other benefits though, transfers between accounts would be easy peasy, everyone would be capable of auditing logs and transactions (that's a wet dream for an external auditor), etc.

Can you elaborate on what you mean by "transfers between accounts would be easy peasy" and "everyone would be capable of auditing logs and transactions" ?

To my understanding this is something that can be covered by common standards on message formats that businesses can send to banks (the same format for many banks, integrated in, say, accounting software) to initiate payments, and by common standards for electronic account transaction information and a legal requirement to ensure that all banks would provide that interoperability. And getting that doesn't need decentralization but rather a legal/systematic intervention like SEPA was done in Eurozone.

Direct participation in payment systems for non-banks is also an option that already exists, but not widely used because of the costs involved, it's cheaper to just go through a bank - if you don't have huge volumes any bank can give you a quote that's lower than the cost of maintaining the service directly, and the businesses that do have huge volumes (e.g. the major auto manufacturers) generally have established their own bank subsidiaries.

Sure!

> this is something that can be covered by common standards

Theoretically, but this has been a failure since forever. I've been moving countries a lot in my life and the hassle is real. Transferwise makes things easier but it's recent, slow and still is a middle-man you could get rid of with cryptocurrencies. With cryptocurrencies a simple transaction would suffice.

> Direct participation in payment systems for non-banks is also an option that already exists

I was not aware of this. I doubt it's realistic though, whereas right now I can (and do) send money to people via cryptocurrencies without a need for a bank.

I think the reason I'm getting downvoted on these posts is that people don't realize how banks interaction and money transfers are broken as soon as you travel and move in the world. Here in the UK banking is really easy thanks to Monzo and Revolut, but go abroad and it already becomes a mess. More and more people are going to have these problems as world travel becomes more efficient and cheaper.

Yeah okay, this doesn't work when moving between significantly different markets, all the decent solutions tend to be designed for centralized markets (by necessity, you'd want at least the laws to be compatible) and the standards work for switching between institutions in that market (or using multiple institutions at once) but not for relocation, unless it's between USA states or Eurozone countries. The global situation is quite fragmented. A good solution that works in Germany won't work in Singapore, and vice versa.

However, I'd wager that it still counts as a small niche for payments - even if we take all expatriates into account (though those who have relocated for years are essentially part of the local market), that is estimated to be something like 50-60 million people worldwide, so less than 1% of individuals (it's worth noting that businesses of various sizes, not individuals, make up most of payments) so experience and needs of people who move around the world (beyond short-term business and tourism) are unusual and do not reflect the needs of the mainstream market. Even if extended travel becomes much more popular (which is not a given, there is a trend in restricting migration), it might go from 1% to 2% of population and still not affect the larger trends.