It was not always the case that currency was issued by a monopoly. There was a time when bank notes were issued by individual banks, and were redeemable for some type of precious metal. These sorts of arrangements had varying degrees of success. For example, in Scotland, free banking seemed to work rather well. The free banking period in the U.S. was not quite as successful, but the costs are often overblown and the problems with this system seemed to have more to do with government regulation than some sort of inherent flaw.
