One of the problems with our US Dollar is that the management of the currency is primarily done by the biggest commercial banks via the Fed. The Fed primarily steers the currency through setting the prime interest rate on bank reserves which regulates the expansion and contraction of the supply of credit. Recently it has increasing explored more extreme policies in times of instability like quantitative easing by actually buying securities to keep markets afloat. But all of its tools are premised on the whole system being debt and backed by debt. There’s no notion of a monetary instrument not backed by debt other than cold hard cash. This makes it difficult for monetary policy to affect the economy without causing inflation.
However, today I became aware of the International Movement for Money Reform and in particular the Ons Geld idea of a debt-free money instrument called a safe account, which separates the holder’s money from the commercial debt-based banking system and causes the banks to actually become subject to free market forces. This is the best idea I’ve seen over the many years of a way for monetary policy to have a sane way to keep a currency stable and to separate it from the vagaries of a private banking system that prioritizes profits. This is mostly being explored in Europe but applies just as much to the US
Debt-free money
https://internationalmoneyreform.org/news/2020/03/new-instruments-for-monetary-policy/
When the safe account is generally accepted, the money on safe accounts can become debt-free. This means that it is no longer considered a claim on the public depository.[21] It has then become the digital embodiment of the general unit of value; digital cash.[22] Unlike physical cash, digital cash can be used as a monetary policy instrument.[23] This makes it possible to expand and control the money supply without increasing debt, and without pursuing inflation. This is the key instrument that is needed to manage the euro efficiently. Debt growth, market distortion and inflation are then no longer inherent to monetary policy. Central banks, however, cannot obtain this instrument on their own. Only the legislator can call digital cash into existence. As a debt-free intangible liquid asset digital cash requires a legal basis.[24] It is therefore a political responsibility to introduce this form of money and to determine the way it is organized. It is thus not the ESCB but the legislator who holds the key to making monetary policy effective and non-distortionary.