Yes, Bitcoin can be an alternative. Though, the adoption won't be as massive as what the government's solution, say digital cash or CBDC. Without a doubt, the vision of a cashless society is nothing new. bitcoins wont to replace FIAT. There is a technical limitation and surely governments do not like a currency that is beyond their own control.

One might argue, the lightning network might be able to solve the scalability problem. Nevertheless, it is very unlikely that Bitcoin can be fully replaces FIAT currencies. So, it is not a scalability problem. In fact, since its inception bitcoin is not meant or visioned as a replacement.