If crypto does gain massive adoption and you are able to pay for things in crypto, there would be less of a reason for people to cash out into fiat. How would government collect taxes from crypto gains then? Also, if something like ETH becomes big, how is the government gonna stop people from making pyramids, ponzis, and scams in general?
Government still earn taxes from VAT in every goods we buying. Government can stop ponzi with regulation and thats why government should regulate cryptocurrency market because many scam ICOs.