It's not even about reputation, it's mostly about taxes. You enforce the private sector using the state's monopoly of violence to pay tributes in a currency that you create. This way, when there are transactions in the private sector, the main currency that people will want to use (provided it's stable enough) is the one that lets them pay their taxes later. You can't pay taxes with dollars in Hungary, which makes Hungarian people use Hungarian currency instead of Chinese Yuan even if the Chinese Yuan is a much stronger currency.
And yes, the state having the monopoly of violence and enforcing taxes is a good thing, before anyone accuses me of being an anarchocapitalist.
Andrew Jackson sold off enough Native American land to cause a real estate bubble, and between that and other things started a bank run, and the kind of people that think they'll win the shell game pretend it's because non-productive debt is good, and the problem was elimination of debt, not how it was done and other circumstances (among them being on a gold standard so you can actually do a bank run)
Lota of differences but the key is: A ponzi scheme pays returns out of future investment. Fractional reserve lending pays returns from interest collected on investments.
