Fiat forms of money are already being rapidly superseded by the digital version
Whether you pay in cash, via bank account or via PayPal, it's the same currency. In fact, using fiat digitally is traceable. Much better for a government.
I think m2017 is a little bit confused about the definition of Fiat here. With "Fiat forms of money", he means paper and coins. Cash is actually pretty much anonymous, indeed.
We'll see how EU's moves against crypto will turn out to be in the long run.
Actually, it's quite predictable. Nothing good is expected, because it is not profitable for governments if people use crypto on a massive scale. Therefore, they will prohibit, limit and demand taxes from this.
This is an interesting topic that you brought up; we've got a bunch of historic examples of prohibition and they didn't all really work out to be honest. So I agree that governments don't like to lose control over the money, but I'm not sure whether they dare to try the prohibitionist route, it can be quite risky.
Prohibitionism is a legal philosophy and political theory often used in lobbying which holds that citizens will abstain from actions if the actions are typed as unlawful (i.e. prohibited) and the prohibitions are enforced by law enforcement.
Generally, prohibition is not completely effective, and tends to drive the market underground instead.
Honestly, I believe prohibition of Bitcoin could actually have the chance to become the biggest driver of innovation in privacy tools and developments in and on top of BTC.