There are cases where people are not capable or knowledgeable enough to understand other cashless payment option. In addition to that, not all entities (especially small time businesses) are also capable to accept those kind of payments. Fiat is the traditional one and everyone are used to it so it's hard to replace everything when people grew up using paper money. Just like what you have mentioned, there are situations where problems occur when using only cashless payment method.

Fiat and crypto can work together in order to alleviate the standards of living of each and everyone of us.