I'm trying to wrap my brain around this, but not getting too far.

Using Marxist language:

Interest is tied to debt. Interest are the fees paid to a bank for loaning 'capital'. Debt is 'surplus-value' (capital) from the future. Debt is needed for capitalism to function. Debt assigns a monetary value to an asset without actually having to sell it. (Selling an asset would give you 'exchange-value'.) Debt allows for assigning capital or 'surplus-value' to an asset. Without debt, assets like real estate would not have value until they were actually sold.

Banks are assigning 'surplus-value' (capital) to assets, and then collecting interest on this assigned value. Banks perform this essential function of capitalism, and are paid by receiving interest. If you break 'interest' you break 'surplus-value'. I.E. you break capitalism.

If you want to replace capitalism with some other system, OK, but what? Seems like you are advocating for socialism, or European style democratic socialism?