Fedwire is a terrible foundation to build transaction processing on, since it is extraordinarily slow - it would fail to handle the needs of even a small villag

Fedwire is a terrible foundation to build transaction processing on, since it is extraordinarily slow - it would fail to handle the needs of even a small village. The "solution" of slapping something like banks on top of it is "let's completely forgo all of the Fed's guarantees and build something else; while still being hurt by Fedwire's cripplingly slow speed when creating our network". Also, the incentive structures being discussed are only meaningful as long as the Banks believe that the Fed will keep increasing the money supply. If it looks like USD is dying, they have every reason to try to squeeze the last few drops of value from it by running an attack on it and running away with what real money they can extract.