The future of crypto currencies is unknown, but it is a new generation of Money which is already replacing the paper currency, especially Bitcoin been the most popular and successful among other crypto currencies so far
From my knowledge there is no day bitcoin is replacing paper money and it's not created to replace paper (fiat) neither was it created to compete with fiat. Bitcoin is created to be a
supporter to fiat where fiat payment can't scale through bitcoin will solve the problem, for instance you can be at your home to transacts some billions of dollars through Bitcoin without have to go queue in bank where they would start asking some silly questions about huge amount you are sending out to people, also in bank there are always some certain amount you can send per day or months but with bitcoin you won't experience those barriers.
This is evidently the case. In fact. I wouldn’t wish for a feature without fiat money where we would have all transactions to be digitalized. Not like that would be the case but, imagine a feature without fiat, what happens when there is a glitch in the network, when your device gets faulty or when you have issues with network congestion as we do now. How would we run our lives and transactions? This is the space where fiat actually fills in and that’s why, both fiat and Bitcoin as a currency becomes complimentary. They fill in for themselves and that makes it relevant.
There is no way the government would give up on centralization which is there very essence and most of all, fiat currency which is there product and the very means by which, they control its citizens.