Even during the period of largely unregulated private banking that reached its peak in the 19th century, the private banks largely just issued paper money that was denominated in coins that were issued by governments.
Even during the period of largely unregulated private banking that reached its peak in the 19th century, the private banks largely just issued paper money that was denominated in coins that were issued by governments.
It took a while for the idea of paper money to catch on, but once fully accepted the modern state became possible.
As to the monopoly on coinage that’s just wrong. Best example
Many private firms would assay gold and strike it into coins. Even though there were many problems with questionable and underweight coins, they circulated because the usability was still far higher than having to manually weigh and test loose gold, and government coinage was scarce, especially on the West coast.
It's interesting that many of the private issues were boldly badged by the name of the issuer. I wonder if the goal there was to establish themselves as trusted third party in other people's transactions. You can't trust this stranger's loose gold, but you can trust it once we've weighed and stamped it.