As could be predicted, banknotes and coins will probably lose their purpose once we have fully adopted some form of Cryptocurrency. This will happen in stages. First we will move from a fiat-based money system to an asset-backed money system. The asset-backed money system will most likely be based on Gold, but this will ironically pave the way for Cryptocurrency adoption. It will be Cryptocurrency that is needed to transact in asset-backed money, since large amounts of Gold cannot be easily moved, and the blockchain can guarantee Central Bank Gold audits.
It could be that we will see all forms of money trade at the same time, between difference groups. Everyday purchases will be done mainly via card or phone, while cash and bullion will serve as more of a backup or savings medium, and Cryptocurrency will be used by governments for large transactions – all at the same time.
Here’s my ‘banknote of the future’, and how I designed it: