FIAT money will never be replaced by stable coins because we have a few fossils running countries on this planet and will never accept this type of technology. This is my opinion.
You are somewhat right.
First of all, some governments do or will push CBDCs. Those can be seen as government issued stablecoins, they are not cryptocurrencies and they're clearly centralized. Those pose some risk against fiat in hand, and not 3rd party issued stable coins or cryptocurrencies.
Yes, some also accept now Bitcoin as legal tender, but they're too few yet and don't change the actual state.
No matter what digital currencies governments approve or push, fiat money in hand cannot easily go extinct. There are always areas (usually remote areas or in closed places - like caves where tourists still go) where internet may reach with difficulty, there are cases (power outages) when life have to be able to go on normally, and yes, there are people who, for whatever reasons, will not use the technology. The governments must ensure everybody has access to money, hence they'll have to keep some amounts of hard cash in circulation.
