Crypto may bring greater benefits to its holders, but it has greater risks than Banks themselves. The huge volatility of crypto can either make you rich or poor within an instant. People who aren't accustomed to the world of crypto, could easily make mistakes that will cost them their financial future. In contrast, Banks are much easier to use and convenient for people within the mainstream world. You'd gain the stability and trust of Fiat currency, with a guarantee that your funds will be safe for a very long time. However, Banks are extremely manipulated by the government and their fees are not comfortable to get a hold of. That's why it's best to use both sides (crypto & Banks) in order to leverage their risks from one another.

You can live only on crypto entirely because it's much more limited than Fiat in many ways. Given how many merchants and businesses widely accept Fiat as a payment method worldwide, it's impossible to use crypto to do the same things you would do with Fiat currency in your daily life. It's hoped that sometime in the future, crypto improves enough to be able to increase in mainstream adoption like never before. But this may take some time, as crypto has some obstacles to overcome (like government regulations, scalability, etc) in order to become as good as Fiat within the mainstream world.

Nonetheless, there's a possibility that we could live entirely off crypto if we get more merchant acceptance worldwide. With stable prices, and a proper regulatory framework, crypto could become an independent monetary system just like Fiat is nowadays. Until then, we would either live only on Banks or use crypto as a complement to Fiat currency. Just my thoughts