[hanniabu]

> Why must they be coins? Why can't they simply develop blockchain technology that doesn't revolve around inventing an all-new currency?

To make it trustless, provide a proper incentive model, and for security.

> just skip straight to distributed systems for managing our existing cash

That doesn't work. Fiat is tied to nation states and are under direct influence by them. One example is how after Trump's term a lot of countries have been divesting away from having so much of their reserves tied to USD.

The other thing is removal of middlemen and having transparent and predictable inflation. You can't do that with fiat. There's central banks that will always be there. Even if you distribute the processing to remove Visa and the like, you will always have the central banks there.