Sure but doesn't that essentially ask the government to back the whole thing? In which case, how is that scenario any different than life w/o cryptocurrency (i.e. physical cash + debit cards + credit cards)?
The government is custodying the crypto, sure. But they can't arbitrarily print more. E.g. you can verify that your note is tied to some amount of crypto on the blockchain.
If you want to self-custody, you can. If you want to make payments on-chain, you can.
The cash is just for convenience and making it more accessible to people who might not have phones. Blending custodial solutions as a way to abstract the complexity of actually using crypto away from people, with the actual blockchain they serve as an interface to, lets people choose their approach based on their comfort level.
