that's fine but the point is you can do exactly the same thing on L1 with bigger blocks. just instead of running an ecash mint you run a node. the main difference being you actually have basic L1 assurances instead of a Rube Goldberg machine you have to maintain built on top of L1.

My best hope for Bitcoin banks that don't give up privacy or rug risk so far is Fedimint. I don't know if they've quite neutralized rug risk but they seem like they may be getting there with some creative methods of blinded federation.