That could be possible to happen in the near future as days goes by we are entering the digital age that means even the regular currencies that we use will be digital as well. So time will come that crypto currencies will replace the regular currencies.
Digital currencies doesn't mean it will adopt the model or concept of crypto currencies, since the blockchain is designed to be decentralised, government will hardly regulating their own coin mainly due to the system they use, instead, they will make a new ones that suits their regulation pretty well. The age of fiat or traditional money is obviously will over, the digital currencies will replace it. But what the digital currencies might be, no one knows.
Just see the result when the time comes, though, cryptocurrencies still facing so many problem some of them are scalability and security (end-user).