Secondly, the entity that collects and spends taxes, is not the entity that prints the money (also for good reason). So in the end your government is just a user like any other user in the fiat system.
If most IT consultants demand to get paid in crypto, and government wants to hire IT consultants, then government will try to get their hands on crypto. Same deal but reversed.
There is no point in a government collecting taxes when they cannot spend it.
Armies in this case are a stand-in for state power.
The entities that collect money and who decides how much money is printed are in reality the same persons.
Some already allow it: https://www.govtech.com/policy/two-governments-charge-ahead-...
So what you said is already proven wrong: They do not demand to be paid in the state currency.
> are in reality the same persons
I'm from Belgium.... how so? I'm sure the ones who collect taxes here (=Country, region Flanders, province and town) are different than the European Central Bank.
The EU is a bit different, but broadly the director of the ECB is chosen by the European Council, which is part of the EU government, which your government is part of, and also spends some of the money collected directly, and instructs national governments to implement and collect quite a few taxes
So now you are saying that the whole economy could run on crypto: Pay taxes in crypto, getting paid by government in crypto.
So the only user of fiat would be the government, because somehow they want to convert first to dollars to go back to crypto.
I think you just made my point, that government has no control over what we will use as currency.