An Interoperability Framework for Payment Systems

Jon Durfee, Michael Lee and Joseph Torregrossa

No 20250327a, Liberty Street Economics from Federal Reserve Bank of New York

Abstract: Novel payment systems based on blockchain networks promise to redesign financial architecture, but a notable concern about these systems is whether they can be made interoperable. This concern stems from the concept of the “singleness of money”—that payments and exchange are not subject to volatility in the value of the money itself. Volatility and speculation can arise from the payment medium, which may have speculative characteristics, or from frictions that undermine the ability of one or more payments systems to interoperate. In this two-part series, we outline a framework for analyzing payment system interoperability, apply it to traditional and emerging financial architectures, and relate it to the ability of the payment systems to maintain singleness of money.

Keywords: interoperability; payments; singleness of money; central banks (search for similar items in EconPapers)
JEL-codes: E5 O3 (search for similar items in EconPapers)
Date: 2025-03-27
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