Rare diseases have been an increasing area of focus as three waves have converged in recent years: the continuing innovation stemming from the genomic revolution, the regulatory financial incentives put in place by the US government for rare-disease therapies, and the increasingly mobilized, coordinated and sophisticated patient community. However, the very nature of rare diseases calls for scientific and societal collaboration on an unprecedented scale. Federated data systems are one such example of this scale. A federated data system is a type of meta-database made up of constituent databases that are transparently interconnected, but not merged – an important point for security and privacy concerns. The result is a robust and well-annotated dataset that in the case of rare diseases can be contributed to and queried by different countries to enable global and country-specific solutions to diagnosis, treatment, patient trial recruitment, and management. The development and maintenance of federated data systems is one of the many investments countries could make in the name of scientific collaboration – but is it the right one? This paper reviews the “known knowns and known unknowns” of a federated data system solution to the unmet needs of people living with rare diseases. Ultimately, investment will be required to confirm and test the value propositions put forth in this paper. Our aim is to enumerate these value propositions along the lines of diagnostic benefit, clinical benefit, clinical trial benefit and personal benefit to individuals living with a rare disease. This will help collaborating nations to understand whether federated data systems are a best-fit solution to the global challenges inherent in rare-disease diagnosis and treatment plans.