'Real' money is magic'd out of thin air anyway. What happens to the crypto coins when the government comes in an cleans out the stash of real money under some pretence of drug smuggling child pornographing terrorists. Or do we end up back at the goldsmiths tale where far more money was issued than was secured because no one ever wanted to withdraw their gold and who doesn't want to be rich.
As others have pointed out this is just a prepaid money transfer system and we already have those. I can see advantages for off the books organisations who want to run a private bank and use this as a transfer payments system but I can't see a lot of advantages over a prepaid debit card.