“Free Banking. In free banking, neither interest rates nor the supply of money is controlled by the government. The Federal Reserve is effectively abolished, and the Department of the Treasury largely limits itself to handling the government’s money.”
Citation: Project 2025, Section 4.4: Federal Reserve, Paul Winfree, page 768, paragraph 3
Context:
This is the first of a number of proposals Winfree suggests for limiting the power of the Federal Reserve’s role, in the absence of abolishing it entirely (in decreasing order of preference/effectiveness.)
Free banking refers to a system where private banks operate without central bank oversight or regulation, such as the Federal Reserve. In this system, banks issue their own currency (notes) backed by reserves like gold or other assets, and market forces regulate the banking system rather than a centralized authority.
For the pros and cons of free banking, see the analysis below.
Full contextual analysis of Section 4.4: Federal Reserve here.
Section: Section 4.4: Federal Reserve