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?
It's easy for the government to collect taxes from crypto owners. With the prerogatives they have, it's easy for them to force each exchange account to look for detailed data from each user.
Also, if something like ETH becomes big, how is the government gonna stop people from making pyramids, ponzis, and scams in general?
Maybe the government will work with service providers, such as Google, Opera, and several other social networks, to banish and hold sudden inspections of suspicious sites, even to close them if they are indicated to harm crypto users.
The governments also have the opportunity to collect the tax and the transaction fees if they will create their own online wallets and allow the banks to start accepting the cryptocurrencies. I think they have to start from the Bitcoin and after the success they have to allow the remaining currencies.