Fiat is necessary because it is far easier to distribute and it doesn't need much infrastructures to make use of and distribute. But i think all thse could be phased out once we have a system where by everyone coyld have access to their accounts anytime and anywhere. Maybe 10 years un the future or so and crypto currency will be king.
fiat currency is needed but the production costs of fiat currency are very limited, and I think it is impossible to eradicate fiat currency, but if fiat and crypto currencies support each other to conduct transactions I think it will happen with full government support