It sounds like you want to build a decentralized, trust-less ShapeShift, that works with fiat, too. But if I have bitcoin and want to pay someone with euros via ILP, then where do the euros come from? Isn’t ILP going to need to a float of euros, as well as every other currency?
I applaud your efforts, but I’m skeptical. I mean maybe you can do crypto-to-crypto, but there’s no way you’re going to automate the KYC and AML necessary to incorporate dollars.