No currency has deposit insurance

The nature of guaranteed banking is that there is little incentive for the bank to hold full reserves. Often the bank will gamble or lend the money it has received in the hope of making extra profits. If the bank loses (on the bet) the original customer will not lose their money because it is guaranteed by the state. The bank can buy assets such as land and if the money is returned to the bank it is able to repeat this process and buy more land. If this continues the bank is able to acquire a significant amount of land and end up heavily in debt... because of the government guarantee. The bank is able to hold on to its assets in spite of its insolvency. Deposit insurance enables the bank to issue its own currency and acquire assets such as land. This makes it very difficult for the rest of the economy to retain assets since the bank is able to 'counterfeit' the currency and buy things. The problem with legalised counterfeiting is that it makes it difficult for ordinary people to hold and retain their assets. It is difficult to compete in the market-place with an agent which is able to print money... so it is clear that the banks are able to buy almost everything they want. Money is no object if you are a counterfeiter. Because (as far as markets are concerned) wealth is not infinite counterfeiters are responsible in part for the poverty of others. Counterfeiters are destroying the means by which the rest of the economy is able to acquire assets. For our money to have value requires that other people are not infinitely rich. If other people can get out of their poverty by counterfeiting this means that the rest of the economy is less wealthy. In a market our wealth depends on the (relative) poverty of others which means that (in a market) counterfeiters destroy the wealth of everyone else. Markets require everyone to be relatively poor if someone is able to counterfeit the currency and buy all the assets then there is no market. If money is not scarce it fails to be a value item of exchange. There is no reason the banks couldn't simply issue currency to themselves and purchase all the assets in the economy. A sound currency requires that there is no deposit insurance. Money needs to be scarce and so if a currency (and its banking system) has deposit insurance then it ceases to be a valid form of money. Money is not money if it has deposit insurance.