...Why would one pay tax on crypto gains in fiat money if the regular tax cannot be paid in crypto?
If you ask me, I will tell you that people in governments that are looking for a way to put tax on cryptos do not understand the chemistry of cryptos. They believe they control everything, including the cryptos they have refused to admit as a replacement to papers they have stored somewhere. This is why you will keep hearing different fallacies from different countries around the world. For example, In my country Nigeria, the federal government announced publicly through the central bank that cryptos are ponzi schemes. Can you imagine that?