The National Banking Act was enacted in 1863 to create a system of national banks in the United States. This legislation aimed to establish a uniform currency and reduce the reliance on state-chartered banks. It allowed banks to issue national banknotes backed by U.S. government bonds, promoting financial stability and trust in the banking system. The Act also introduced federal oversight of banks, requiring them to adhere to specific regulations. This helped to standardize banking practices across the country and laid the groundwork for the modern banking system, influencing future legislation like the Federal Reserve Act and the establishment of the Federal Reserve.