Competition between Euro, Dollar and Yen hasn't removed that power, why would competition between banks or other domestic issuers?
What backs the Euro, Dollar, Yen, et al? Do we believe in free markets or not?
Competition rules and all must obey the law of supply and demand. The world market has decided it wants one currency: the U.S. dollar. Sure, some places use other kinds but they all evenutally end up going back to using dollars. Kind of like Windows vs OS. I recently visited a factory making Apple computers and computer systems for running the line and QC used applications on Windows platforms.