No, the government will not demand to get paid in crypto. It will demand to get paid on the market equivalent of the crypto in Euros and Dollars. Then they can convert it back if they so choose.
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.
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.
Those governments are directly converting the bitcoin to US dollars, thereby creating demand for US dollars when they spend it. The result is exactly the same.
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
> Those governments are directly converting the bitcoin to US dollars, thereby creating demand for US dollars when they spend it. The result is exactly the same.
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.
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.