You actually did not give strong reasons why cryptocurrency can't replace fiat currency. Cryptocurrency can actually/theoretically do most things fiat currencies can do, but I doubt typical fiat currencies can safely do most things cryptocurrency can do with losing their centralization. Besides, government can run their fiats on Blockchain or other real decentralized system.
Crypto could actually work better in rural areas than fiat, even without relying too much on internet. But I believe safe/crypto-friendly worldwide rural internet coverage is a possibility in the future
I believe that specially today that Coronavirus spreads through social contact. They are saying that the easiest way to transfer the virus is through fiat currency. Imagine, they are saying that virus can leave in fiat. So, covid seems to be a startup in a cashless society. Believe me that covid is a way to present cryptocurrency.
You totally make an awesome point there mate because the banks was said to quarantine fiat currency to prevent the spread of the virus and alot of questions are asked these days about cash been unsafe to use during the pandemic which i believe will give crypto currency more exposure but despite that some people will still choose to use fiat currency.