Why are government in the money business?
Blessed St Margaret and Holy Tony both believed that government shouldn't be in the coal, steel, car making or telecoms business because that was the job of capitalism. So why are governments trying to make, buy and sell money?
Why not let the banks handle the whole fiat currency bit?
In theory I get paid in $ but I really get paid in numbers at HSBC. I spend in $ but really I spend in "Visa". Both HSBC and Visa could have their own currency - and effectively do.
There could be bargain banks that would have to offer better rates to make up for the fact that few stores would accept their notes - in the same way that discount stores don't take Visa.
And there could be highly insured, low leveraged, prestige banks that could charge me higher fees because a RoyalBankofXYZ note is accepted everywhere.
The government could demand that my taxes are paid in their official notes and there woudl be a free market rate for these in all the other day-day currency