Many governments still hold substantial gold reserves. Btw I believe that there is no chance for Bitcoin to entirely replace fiat. Bitcoin payments are fast only through Lightning Network, it's slow when you use it traditionally. When lots of people make transactions, fees go to the moon and even in a very small nation, you should expect millions of transactions every day. Bitcoin won't be able to handle that. While Bitcoin is not the best currency for payments, it's the best to be used as a reserve, asset. Bitcoin's price is only going up and its probably a million times cheaper to securely store Bitcoins compared to gold reserves, which need very high physical security.
Bitcoin would be able to replace Fiat if it was scalable enough for the whole world. But that will never happen, because it's not in developers best interests to do so. Not to mention, governments won't allow a decentralized cryptocurrency they can't control to take over the mainstream economy. Considering that BTC was designed with deflation in mind, it will continue to be used as a store of value for generations.
For currency use cases, altcoins are a much better choice. We already have coins with near-instant confirmation times and zero fees. People can use those as digital cash if they want to. But be aware, convenience often comes with its risks. Faster speeds and lower fees = a less decentralized and unreliable network. Many countries just want the huge taxation benefits Bitcoin provides. Not to make it an official currency. Even El Salvador kept the USD as its secondary currency (despite making BTC legal tender). Who cares, anyways? As long as people are able to obtain true financial freedom through Bitcoin, nothing else matters.
