wheatstone im totally open to alternatives that will make the reasons for receipts on crypto reserves being used as money be obsolete, because it would be better that way for everybody. Note issuing leads to fractional reserve lending which exposes some degree of risk to an economy.

However, that being said, I don't think it can be avoided, so therefore maybe a decentral thing can be invented to do this instead of private bankers.

To move on (although I don't mind still trying to convince people that the need is there and will be met one way or another), how about this initial idea:

Make an ATM machine (or many). Instead of filling it government fiat notes, fill it with blank tokens with a smart chip on each one.

When somebody wants to make a withdrawal, they use some gizmo like maybe their phone app to sign a transaction of crypto in the amount they want in "cash" over to the network's crypto reserves. The networked ATM creates a random asymmetric key pair (having nothing at all to do with crypto addresses), puts the private one on the smart chip and stores the public one in its decentralized database. The plastic that this chip is mounted on can be printed with the correct denominations or amount of the withdrawal, for convenience.

This plastic thing with a private key on a smart chip is the cash that can be used to transact with indefinitely, locally, person to person, over and over again. If this existed right now, we could each probably talk 10 merchants in our area into accepting them if they knew what bitcoin (or crypto in genral) was and how it worked, what the exchange rates were, where to find out, etc. We could more easily convince regular people to receive and spend them who would have normally have never even tried to get their first piece of crypto.

When somebody has a piece of this cash, and they want crypto in the blockchain, they can go to one of these ATMs with their phone app, present their crypto address they want to be paid, insert the plastic thing with the smart chip and check its signature against the public keys in its decentralized database to verify it, then pays the crypto address.

This is basically the gist of it. It surely can be optimized greatly. It obviously doesn't address accounting entries of these things that can be stored digitally. Counterfeiting must be addressed.

The reason im bringing this up is because i think it is unavoidable that private banks will perform this function, as they always have in the past, unless a decentral one is there already to compete with them.