As you point out, a hybrid system which leaves banks able to create credit would be riddled with difficulties,and therefore legislation would be needed preventing banks being anything other than deposit takers or service providers.

And of course turkeys don't vote for Christmas.  

The banking system is either disintermediated, or it isn't. Money is either an IOU credit object: or it's a relationship in which credit is an integral part.

Personally, I see no role for a Treasury as a middleman any more than I do a Bank either in public or private ownership.

The system I advocate, as I have long said, is in fact (a)"Peer to Peer"  "trade" credit - supported by a mutual guarantee etc etc on the one hand; and

(b) Peer to Peer direct investment through production/revenue sharing "Unitisation".

No legislation is needed for that model: people just have to agree to do it.

"The future is already here -- it's just not very evenly distributed" William Gibson