@Dirk
If you eliminate the un traceability from crypto currency you'll end with a... traditional currency, as the very base of crypto currencies is the... crypto . ;-)

Having a currency granted by, I can say, Asgardia National Bank, under the control of Finances Ministry, will give the insurance every business you'll do with the funds will be covered (by national funds and assets): cryptocurrencies', like bitcoins, problems is everyone can found an " untraceable bank ", giving away just " paper " (certificates)... then leaving with the cash, being sure he/she won't be caught.

Last but not least, our currency must have a conversion ratio with foreign ones, to make business, sell and buy goods on international market: that means other countries have to accept it and not list us into grey-lists , like many taxes paradises are.
If we'll start with a cryptocurrency we'll be prone to fall under crime and mafia about money laundering : they will buy our currency for sure, to leave us with dirty money ... not something we'll like to have for sure.

The problem with cryptocurrency is

1. traceability: cryptocurrencies are expressely made to avoid it
2. insurance: if you don't have traceability you don't have responsability (see Mt. Gox for further references)
   
   These two problems leads to
   
   
3. anti-money laundering which, in short words, means that, if we won't agree with international (Earth's) standards, we'll be enlisted into " grey lists " and other countries won't make business with us (it have been a problem for Switzerland too, so it coped with international standards to be de-listed, just to say).

That's why is preferable to have a traditional currency, even if all money transfers can be made digitally (EFT: Electronic Founds Transfer) without the need of a solid (metal) money or to relate our currency with something other which have value per se (e.g. gold).

The problem with physically-based currencies is that basing value on physical goods lets one be dependent on the value of those goods changing.

A good example is the gold standard. If something was to happen to the price of gold (like, say, Asgardia finding a large asteroid made largely of gold), then the value of all currencies tied to gold would plummet, because the price of gold would drop like a rock.

Cryptocurrencies are only good as long as we have computers and telecommunications. That means we'd have to have our currency system linked to our telecommunications (I believe, I may be wrong), which I find is a big security problem.

Until the Constitution is out, I am trying not to put any strong thought into currencies, economics, or trade because all of those will be wholly dependent on what the laws are with regards to those transactions.

HEW