Open Money is interoperable

Interoperability is all about efficiencies that save time and resources

The programmability and composability of Open Money are two features that make interoperability possible.

Interoperability is an elaborate way of saying “things work together well, or systems that easily mesh.”

For all of the value props or marquee-style marketing features of crypto and Open Money, like the kinds of themes you might see in Super Bowl ads, one of the real, undeniable features of Open Money systems is that they can be designed and built as interoperable components.

Part of the reason is because Open Money is code-based systems. Part of it is the composable design, and part of it is a forcing function.

Since Open Money is network money and networks need liquidity to survive, then the ability to move assets and value quickly and easily between different protocols and applications makes it possible to rapidly grow new networks with minimal friction or cost.

Right now, the main applications for interoperability are when using services like DeFi or bridges. Cross-chain decentralized exchanges (DEXs) allow users to swap assets seamlessly across different blockchains, eliminating the friction of siloed liquidity pools. Stablecoins like USDC operate on multiple chains, providing a universal medium of exchange that can move effortlessly between ecosystems.

NFTs, which were once locked into specific marketplaces, are increasingly becoming cross-chain, enabling broader accessibility and liquidity.

Payment networks like the Lightning Network, which operates on Bitcoin, are now being integrated into other protocols, expanding the potential for instant, low-cost payments.

Even enterprise blockchain solutions, like those used for supply chain finance, are leveraging interoperability to settle transactions between distinct financial systems in real time.

But an easier way to understand the full potential of interoperable systems is to look at the inefficiencies of the legacy financial or money system — and the cost in time and money (not to mention massive stress sometimes) of systems that are not interoperable.

If you’ve ever had to wait days to send money from one bank account to another or more days for payments to clear, then you know a little bit about the value of interoperability.

One of the biggest advantages of Open Money is that it helps increase efficiencies across money systems. It’s important to note that these gains in efficiency also come with risks. But as Open Money systems mature and move from the frontier or experimental phase to more established technologies, the security issues will likely resolve.

At the same time, building new kinds of financial apps on top of systems that are natively interoperable and that can leverage the full potential of quickly (and cheaply) moving money between systems will also create new kinds of economic activity, like new kinds of trading, or AI agents who can quickly make payments or balance books.

While it might not be as glamorous as borderless money, or the ability to spin up a memecoin, building entirely new systems that can leverage one another to create efficiencies at scale is a major unlock made possible by Open Money.

This post is part of the Open Money project, an ongoing series that forms the basis of a longer work. Subscribe to get a weekly update as it unfolds.

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