Is it possible to build distributed exchange?

set of trusted people can change BTC to USD and back using their bank account or/and Paypal

single transaction can be split into several $10 transactions to minimize the risk if one of the "trusted people" failed to transfer money

in order to be moneychanger you need to make a security deposit equivalent to you daily volume limit. Security deposit can be help by higher rank moneychanger.
over the time regular moneychanger can became higher rank moneychanger.
Each transaction can have 0.1% fee to cover distributed exchange risks.

User can download desktop exchange application similar to p2p client which connects to the distributed exchange network.