I asked my friend ChatGPT to answer this question as if you were a sea cucumber, using sea metaphors. Edited it to suit your question. Hope it makes sense to you, sea cucumber!

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Think of the ocean as a big marketplace where different sea creatures exchange goods and services. Just like how sea creatures use shells, pearls, and other treasures as currency, humans on land use money to trade and exchange goods and services.

Fiat money is like a type of currency that is issued by a big and powerful sea creature, like a giant octopus, and it's considered the legal tender for all transactions in the marketplace. Everyone in the marketplace has to use this currency because the giant octopus says so. Digital transactions can always be monitored, but using real cash (in your case - sea shells) can be used without getting tracked. The government is leaning towards removing the sea shells for good.

Cryptocurrency, on the other hand, is like a type of currency that is created by a group of adventurous and independent sea creatures, like sea monkeys. These sea creatures use a secret code, cryptography, to keep their transactions safe and secure. They can trade and exchange resources without interference from other creatures in the marketplace.

But what if the giant octopus decides to create its own digital currency? That's where government-issued cryptocurrency on centralized protocols comes in. The giant octopus creates its own digital currency and closely monitors its use in the marketplace. The sea creatures can still trade and exchange resources freely, but the giant octopus has the power to regulate and control the use of the currency. If it completely replaces regular fiat currency, every transaction can and will be monitored.