However, in this practical case, the government is forcing people to make bad choices (to use a second rate fiat currency). It understands it is forcing people to make a bad choice, because it doesn't want to make that choice itself.
This is the thing I don't get about more tin-pot dictatorships. It is obvious why the States force people to use their first-rate fiat currency - the US benefits hugely from people using the dollar.
It is obvious why Iran might force its citizens to use the US dollar - if they didn't they probably get invaded by the US on some flimsy pretext.
But why force people to use a local fiat currency? It just makes their country poorer. Why are there all these idiots who look at their own economy and think "gee, this thing might work to well if we let people save in a liquid asset"?
How do people think they are going to generate wealth if not incentivising people to consume less than they produce? It is the only reliable path. Why do all these governments find it so scary?
It is unjust to delegate moral rights we do not have, and could no not legitimately exercise on our own in the absence of a state, like jailing peaceful people, to the state.
People who aren’t the government do, in fact, do that.
With a strong and effective government, there is a high probability that they eventually face significant adverse consequences for doing so, which may deter those who are deterrable, but even then it still happens.
You cannot imprison other people, but your government sure can. There are many cases where the government has special jurisdiction as compared to citizens and it is clearly recognized as a moral thing to have in democracies around the world.