The issue comes when you want to get a loan or mortgage. How does the Fed know if you're financially stable? How on earth can the Fed know how to centrally decide?
In general the answer is: split the savings and investments in two different entities. One entity that saves but has forbidden to invest, and an independent entity that invests.
If the government essentially guarantees all deposits and generally decides who gets a mortgage … I am not sure what the main point of banks is for consumers apart from maybe charging exorbitant rates on credit cards.
If you just want an electronic money account with which you can send and receive and store electronic funds, and not risk losing it, keep it with the government.
And add legislation with it that requires the government to provide everyone with an account, even criminals, and it cannot be closed, and any seizures have to be from court orders, but the ability to transfer/store money electronically remains an inalienable right.
Just look at the balance sheet of SVB
https://www.bankofengland.co.uk/-/media/boe/files/quarterly-...