The idea of private coinage seems so strange today that it is worth examining carefully. We are used to thinking of coinage as a "necessity of sovereignty." Yet, after all, we are not wedded to a "royal prerogative," and it is the American concept that sovereignty rests, not in government, but in the people. How would private coinage work? In the same way as any other business.
With minimum regulation, a proliferation of 1,600 local state-chartered, private banks now issued paper money. State bank notes, with over 30,000 varieties of color and design, were easily counterfeited. That, along with bank failures, caused confusion and circulation problems.
Many state-chartered banks also issued notes that, because of the lax state banking laws, often greatly depreciated in value. After the closing of the second Bank of the United States, most of the paper currency consisted of notes of state-chartered banks and circulated only in a limited area.
Private banks are allowed to print their own notes in most countries as long as they don't declare it is legal tender, but they don't due to the simple fact that they cannot compete with the state monopoly. Central banks were tied to the government and thus had free law privileges and the "legitimacy" of the state behind them, essentially a subsidised currency.
Also >>9 is right. People who take it apon themselves to reveal to the world that "LOL MONEY IS JUST BITS OF PAPER IT HAS NO VALUE HURR" are smug pseudointellectual neggartitties.