For examples of this see LIBOR/"Eurodollar"
The cost if it doesn't work out is damage to the trust in the system and the stability of the dollar in general, which is the thing the Fed pathologically seeks to avoid.
And as the country that can mint the currency the IMF designates other countries' international debts in, the US doesn't generally see itself in need of further strengthening the USD's position in the world.
(Interestingly, when I lay it all out like that and add it up, the US monetary policy looks like a big business's bureaucratic system, the kind that'd be ripe for disruption by a startup. Of course, it's not quite so simple when we're talking nation-states and not Silicon Valley ventures).
That’s because governments have the privilege of establishing itself as a monopoly. They control the rules of the marketplace via regulations.
What I find really surprising is that the government hasn't created a set of standardized APIs for financial transactions, flowing through traditional web/cloud/mobile tech. From a tax collection/enforcement perspective, it would seem to be in their interest to make "smart money" with convenient P2P digital transactions. Given the transparent corruption between Washington and banking institutions, I wonder if they don't want to risk being disinter-mediated, or if no politicians have even tried to pursue such a thing (the closest being Warren's plans to add banking services to USPS, which I think is a great idea).
I don’t really see why the govt. would need to create such a system; the private banking and consumer finance space has been doing an acceptable job so far.
Moreover, as BTC mining consolidation demonstrates, it's certainly possible that distributed systems tend to devolve to quasi-centralized systems with extra steps (Exhibit B: GitHub massively dominating the "distributed" git ecosystem).
> the private banking and consumer finance space has been doing an acceptable job so far
...really? Can I join you in your alternate universe? :) The fact that none of the consumer payment systems (PayPal/Venmo/etc) interoperate with one another is nothing short of embarrassing in 2020. Or the fact that ACH doesn't operate on weekends or holidays, as though all transactions were still processed by humans working M-F 9-5. And that's saying nothing of the missed opportunity for smart money / smart contracts to be baked into USD itself.
We don't need blockchains to upgrade money; just government mandates/incentives for standardized APIs to be implemented by banks and user-facing applications.
The unavailability of ACH on the weekends is less of a protocol problem and more of a habitual problem; bank transfers used to require people doing work by hand, and that habit remained.
I think smart contracts have proven themselves to be significantly less useful than originally anticipated.