This lessens “competitiveness” in the short term, but helps preserve it in the longer term by maintaining discipline over domestic costs. Moreover, the level of relative unit costs in, say, manufacturing, that is “needed” is a function of several factors, including the terms of trade.
Today, the predominant forms of money used in payment systems are Federal Reserve notes and reserve balances as well as transaction balances at depository institutions. Payment systems also require a technical network to hold and transfer money. In earlier times, the network was less technical in nature and almost exclusively designed for the logistical storage and transfer of physical forms of money.