As for the banking system taking care of its own reserves, this seems an almost trivial matter. The private system developed forms of elastic money that could come into existence during a crisis and be withdrawn afterward. Arguably, regulation through the Federal Reserve is suboptimal, because thanks to the Fed there are not competing regulatory formats in the comprehensive banking system. Constitutionally, the United States is to define the dollar, to “regulate” its value. The idea that the United States itself should produce that money, that currency, is almost exclusively an artifact of wartime.

Source: Forbes January 25, 2020 03:00 UTC