There will come a time when fiat money and other traditional currencies will be replaced by cryptocurrency for purchasing products and services. This shift is driven by the decentralized nature of cryptocurrencies and the use of blockchain technology. While this change may not happen immediately it is approaching. The transition from traditional money to cryptocurrency is inevitable and will bring about significant advancements in the financial system.
doubt that, government in general won't let their fiat be replaced, because then they can't control the economy, fiat is a good tool to control the economy, maybe traditional cash will be replaced by CBDC, but definitely not decentralized crypto, though crypto might be used as an alternative of payment, there's reason why many countries decide to recognize crypto as commodity only for investment because they don't want it to be used as currency. so in the future i think things will more or less stay like this.
Definitely governments are going to be not happy with this idea and mostly will never go ahead with this as well because things could be more flexible for the common peoples which are not suitable for them even in many countries we have such things which are now doing good and have better development in near future as well, but this could be huge problem for peoples those are not well aware and specially third world is not well prepare for this in long run.
We can go with this idea, but first we need to be had all requirements which give better use case with all material which are important while currently we have few things which are giving good advantage and this could be also go good with just few miner changes in the future.