The Spaniard on Competing Currencies

It has been said that Ron Paul is moving away from gold-backed money and moving towards competing currencies. In reading Dr. Paul's latest book, "End the Fed" however, there was precious little about anything but the tired refrains of how gold is "sound" money. I've been confused as to whether a competing or complimentary currency could be manipulated in the same way as our money is today, however, my friend, the Spaniard, recently laid my fears to rest. When the Spaniard speaks, the crowd should listen.

"Here's my thinking on why I'm not too worried about the threat of competing currencies to our ideas.

"Let’s assume that a national, publicly issued, debt-free, non-commodity fiat currency is well established, as most of us here would like to see, and that it is good for the payment of taxes. Then we have a universal means of exchange which is (exclusively, transparently, responsibly etc…) issued by, used by, and received back (for tax payments) by the maximally inclusive collective of people, which is usually the nation state. This utility is provided at negligible existential cost by that nation to itself for its people to conduct their business.

"Can any alternative currency compete successfully against this? The national currency is ubiquitous and hence maximally convenient and liquid. Backed by legal tender law (everyone is obliged to accept it as payment) it is maximally robust and risk-free. Every taxpayer needs it so it is always in demand.
 
"Any competing debt-based commercially issued currency would necessarily impose upon its user base the cost of its own existence, specifically the quantity of it in issue multiplied by the average interest rate spread between its borrowers and its depositors. This is the system that we have now, and by its nature any debt-based currency entails continuous transfer of wealth from its user base to its issuer-lenders. This inherent cost ensures that any such debt-based currency cannot compete in general against the proposed debt-free, persistently circulating national currency. What user base would willingly pay extra for an inferior, riskier, less than universal currency? Why participate in a costly commercial rent-a-currency scheme when you don’t have to?

Drinking the von Mises Kool-Aid