So, once the taxman recognizes something as money - it is money.
The next issue: how to maintain that money to be sound.
It cannot be maintained to be sound by competition - we have shown that competition evaporates, not because of quality (or lack of it), but because it is not used to pay taxes.
Today we have lots of monetary competition - there are hundreds of currencies, precious metals, commodities, etc. called "economic goods" ... and money is just another economic good too. So we have competition for money - which drives the demand for money up and down - and following the law of economics which applies to all economic goods, including money, that will change the price of that money within the economy.
So, again - competition against money does NOT stabilize it on its own - indeed, what competition does is expose the underlying stability or lack of it - it does not create it nor destroy that stability. The stability must come from somewhere else other than currency "competition".