Only a few Governments may legalize crypto, like you saw the case with El Salvador. So many Government will not Legalize cryptocurrencies for obvious reasons. One of them is that they have no control over the cryptocurrencies like Bitcoin.

Maybe what we shall see in most counties are Central Bank Digital Currencies (CBDCs)

I will be assuming that you are talking about legalization of bitcoin and other shitcoins in today's economic world.

Economy will become more globalized. It will be easier to perform cross-border transactions and trades. Which will create an influx of new investments. This could go either way,  but if such cross-border investments with cryptos are done in a controlled and regulated manner then it will be very positive.

On a domestic level, monetary policies will become redundant due to free flowing nature and volatility of cryptos. It will have a huge impact on everything. So it's not going to happen unless the state can at least control the supply of cryptos and have an influence over its price. These two conditions have to be met, before they even think about legalizing it.

A stable implementation of cryptocurrency will increase the participation. Which means more money to invest in new businesses, which means more jobs, which means more spending, which means booming economy  
This is an ideal case, i.e. the cryptos were integrated in a very controlled fashion into the system and citizens are smart enough to access its potential. Otherwise it will be a disaster.

Deeply doubt that would happen
It's more than payment
and much bigger for mainstream adoption

but the central government will not let cryptocurrencies rule everything. Currently, cryptocurrencies are subject to various regulations from each country's government and even impose income taxes on cryptocurrency users. so in real it will not happen completely, crypto is still under the shadow of the government and will not be able to escape. When cryptocurrencies dominate all sectors, they also cannot regulate the global economy, and the risks posed by cryptocurrencies will also be dangerous for those who do not understand and do not understand how to use cryptocurrencies.

To some extent the governments will try to limit the usage, fearing the control. Beyond certain point, only option is to regulate the usage. At such instance governments will find ways to regulate the usage and start making revenue out of the taxation. This is what happening with my country, now we're having the highest taxation of 30% on the profit.

Apart from this governments were also developing their own CBDC which is a digitized form of keeping track of every transaction of the common people. Through this privacy gets disturbed, but government find it good for administrative needs.

Due to the nature of cryptocurrency as being volatile, It’s very to get even a slightest approval for crypto to become a legal tender. Only few country do this and the most popular was El Salvador which didn’t go well because there people protest about there leader moves that result to huge loss of there countries funds. The government wouldn’t allow this to happened because this will change the global economy and will make fiat less use since people will choose the currency with limited supply over fiat that is probe to inflation.

Legalizing crypto as payment are impossible since it need Bitcoin is successfully legalized in the entire countries, this will attract other countries plan to accept other coins. But sooner or later when one of coins they've accepted but become scam, anyone will realized only Bitcoin is a coin which never scam or manipulated.

I'd say it's high likely Bitcoin will be accepted in most of countries as a payment alternative in the future, but not with the other cryptos including Ethereum.

governments will continue to measure their citizen labour force in fiat
with minimum wage laws, tax laws, court fines, bail and compensation laws measured in whatever currency a government prefers

where by crypto is treated the same as investments, shares and pension plans.

Each country has its own government and you need to proceed from this. If the government of one country legalizes bitcoin, it will have no effect. But there are also details here: we are talking about small and weak countries, like El Salvador, changes in which have no effect on the rest of the world. The picture is completely different if bitcoin is legalized in an influential country like the United States and China. The consequences will be colossal. The catch is that strong countries are very reluctant to move in the direction of bitcoin adoption, in contrast to, for example, El Salvador, which took such a step not from the best life.