So the Bank of North Dakota would have to obtain Federal Reserves for those payments to clear.

What North Dakota could do is to issue vouchers that are accepted in payment of state taxes, ... but the degree to which they would be accepted in payment in general would be more limited, because the US$ is good for payments of Federal, state and local taxes and settlement of contractual obligations anywhere in the United States, so if, say, timber is imported to build a house, the source of the timber might not accept North Dakota tax vouchers.

North Dakota cannot force people to use North Dakota tax vouchers as a medium of exchange in the state by forcing people to accept them for all debts, public and private, because that violates the Federal prerogative to issue currency. North Dakota can only issue a voucher for the debts owed to it ... and then it can run into trouble if it needs to make US$ payments and only have vouchers being paid to it in taxes.

This is the same as the "local moneys" question, and while a state could stretch its ability to help those in need with a well planned "state bucks" system matched with hiring people to provide for basic needs paying a mix of dollars and vouchers and accepting vouchers in payment for the basic needs ... it cannot use a local money as a general substitute for national currency.`

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.