Bitcoin will not be able replace fiat for now because of several factors. Among them are unstable bitcoin exchange rates and international laws protecting bitcoins dont' yet.
Yes there are a lot of factors that bitcoin really can't be considered for replacing fiat. Even the price is getting higher and higher nowadays still that is not going to matter because in the end the government is the one that will be followed and law makers are coming from the. But let's see one day we will be having paperless transactions.