Problem is with your idea you have to trust politicians to stop printing money at some point and renounce that power, which is as realistic as giving your house keys to a thieve and ask him/her to watch your house while you are on holidays.
You missed the point. I'm counting on them NOT renouncing their power, but instead hyperinflating themselves out of debt which would render the currency worthless (hence, "perfectly useless fiat money"). If a stable decentralized currency (like Bitcoin) is a viable alternative in the public mind, they can go ahead and remove a few zeros from their currency afterwards and try to start over like nothing happened, but nobody would go for it. The only reason people still rely on this system is because they don't see an alternative. To be clear, I'm not advocating hyperinflation WITHOUT such an alternative.
You know what, despite that hyperinflation will bring pain, this you are decribing might be the most realistic option. Anyways, hyper-inflation of the government currency is going to come at some point, like it has always happened. So one way or the other, its going to happen.
