The concept was great.
Unfortunately the banking system ain't going to allow a single dollar go unchecked.
You can't simply wrap up a whole other financial system or operate one of the side without the powers that be getting their hands all up in it.
The government always gets their cut.
You're right about this part. The success of a financial system and currency is based on trust in that system. The US dollar and financial system are backed by the US government with a large tax-paying population, a powerful military, and years of experience.
The fed or the current financial system is not perfect, but it's partly responsible for the greatest economy in the world plus managed to get the country through some major recessions and other financial events and that counts for a lot.
Crypto's lack of success as a currency is not because of the government. People have no reason the switch to it, it offers none of the benefits of the U.S dollar and none of its protections.
Why will manufacturers, suppliers, farmers, miners, or even employees want to accept payment in crypto? Not even the people that work at coinbase or similar places will accept payment in crypto
There is a good reason why the rest of the world buy assets in the U.S, even the Russians and Chinese.