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> an intermediary credited another institution only to realise later they didn't have the money, and have to beg pretty-please to return the payment over a SWIFT message (there is no guarantee here, at best there is "market practice" which is basically just manners, but for banks)

But this situation is not made any better by a blockchain - there's still no way to reverse a transaction except asking nicely and hoping the other party obliges, right?

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I was only disputing parent assertion that trust is a solved problem and that banks don't "need" a solution.

I haven't the foggiest if stablecoins solve these problems any better. In theory I think all participants having visibility into the ledger would at least answer the problem of "where actually is the money", but I'm not even sure of that though because of fiat on/off ramps, custodial arrangements, roll-ups that might happen off chain, etc.

I don't know if you could use smart contracts to encode a recall/dispute resolution process into transactions but that's very hand-wavey and possibly collapses under scrutiny!

All in I've no idea if crypto helps us here but I do think we have a long way to go either way.

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