I highlighted this point specifically because we are not free to conduct commerce in any currency we can get accepted by those with whom we trade. By law, we’re required to use the state issued currency.

What law? At one time prior to the Federal Reserve Act (1913), there were over 150 currencies in use in the US. It was only the strength of the national currency and the backing of the Treasury/Fed system that eventually unified the nation under one currency, not any law I am familiar with. As I mentioned, grocery coupons are a form of currency. Bitcoins could be a currency, but until they are accepted in payment of federal taxes they will not have significant demand.

If you are referring to tax law, I can understand that. Any economic gains/loss must be reported for tax purposes. Any such gain/loss in another currency, or barter/trade, must be converted to US dollars and reported in that equivalent. Taxes must then be paid on those using only US dollars. Taxation drives the demand for the currency and draws resources into the private sector where they are available to provision the government on demand without requiring a revenue stream. The US also cannot be encumbered by any debt not denominated in the currency only Congress can create, including gold now.

Banks create reserves of US dollars, but only within the Reserve system. They are necessary to provide for interbank transfers of loan proceeds, but each principal payment destroys an equal quantity of reserves/bank obligations. Those principal payments can only be made with M1 money that Congress creates, which means that private bank debt created reserves cannot “net” retire the debt that created them.

I know that it is a rather convoluted logic path, but the information is included here to ascertain the “fact” that, after accounting for private sector bank debt, our national debt is nothing but an accurate accounting of all “net” currency in circulation expressed in Treasury bonds.