These nation state level actors would need to convert their Bitcoin into something that they can actually spend. Governments need to pay employees, contractors,

These nation state level actors would need to convert their Bitcoin into something that they can actually spend. Governments need to pay employees, contractors, and suppliers. These people want actual currency they can spend. The main alternative would be to issue a Bitcoin backed currency. But then you're just re-creating the gold standard, and all of the problems that go along with that.