Talking about the Web3 effect on the government is a scary and complex topic. You mentioned about "...using cryptocurrency for payments wherever possible. ...earning one's living via these platforms." This might be ok if only a few do it. But imagining a majority of the workforce doing it can be bad. There will be significantly less taxes. And while taxes are usually mishandled, a lot of them are still used for real world services; like maintaining roads, paying for public workers [police, garbage collectors, etc.]. While things might be shifting to global, there are still a lot of local things where the government is needed.