Without the state there would be no paper money

In a free market there is no prohibition on printing (and counterfeiting) any form of money. Which means that (in a free market) there would be no valuable paper money... since it could easily be counterfeited. The only possible form of paper money would be that with a very high level of encryption. The value of the paper monies we see in circulation today depends largely on the illegality of counterfeiting them. We know that paper money is not money and we can also deduce that... in a free market (since counterfeiting would be possible) there would be no paper money. It is only because of the state that paper money exists. Paper money relies on the state to exist.