Militarily robust sovereignty is necessary but not sufficient for the integrity of a fiat currency.

Governments such as Iceland borrow military power through international agreements.

Robust against what?

Threats to national sovereignty such as invasion.

I don't really see how protection against invasion helps you maintain a fiat currency. I don't think an army is either necessary or sufficient. These just seem like two different issues.

Do you have an example of a nation failing to repel an invasion yet maintaining the integrity of its currency?

You're shifting the goalposts. Lack of protection against invasion doesn't mean you're going to get invaded. Maintaining a standing army isn't protection against invasion either.

Do you agree that if a nation is successfully invaded its currency will lose its integrity?

Do you agree that defense against invasion requires an adequate military or agreements with nations with adequate militaries?

If we agree on those two claims, it seems we must agree that militarily robust sovereignty is necessary but not sufficient for the integrity of a fiat currency.

No thats actually the right way to think about this. Externalities are often misinterpreted to only include a few layers of abstraction when in reality its a much more complex and multilayered discussion and include both positive and negatives.