It could be a great lesson in fiscal responsibility, but more likely what would happen is that they would come up with some new fractional reserve system between various governments and central banks which would allow them to spend 100 BTC for everyone 1 they actually hold.
But, why would they legalize and enforce Bitcoin usage if they continued using a fractional reserve system? Correct me if I'm wrong, but such system works only if there's demanding for new loans AND available reserve from the clients' deposits.
For instance, I may not want to move around with $10,000 neither to store them in a closet, so I'll deposit it in a bank and feel safe. But, with Bitcoin there's no need to worry for such scenario. It can be hidden much easier than with cash. You also don't need to move around with it, as you can send most of your coins to a cold storage.
In the current monetary system, your bank is useful. You use it to transact with. When it comes to withdraw your funds, they give you an IOU which can be used as currency.
I may have messed up some things again, but it seems to me that the easiness Bitcoin provides replaces some functions of the bank. Currently I need the bank to transact online, so I'm forced to increase their liquidity. With Bitcoin, I won't have to.