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As of now, most of us have to cash out Bitcoins into the fiat currency in order to spend it but that's definitely not the Satoshi's expectations for Bitcoin.
Unfortunately since VISA has ended the partnership with the bitcoin (or other crypto) connected card issuer companies, you can only spend your coins after you have cashed them out. I know that when someone was using the bitcoin backed VISA debit card at the merchants, the card issuer has exchanged the bitcoins in the wallet on the fly, and the merchant has received the exchanged fiat equivalent amount, but that time you had to exchange the exact amount and not a bigger sum at once.
These days, merchants usually use bitpay to exchange the bitcoin payments, because it's easier for them if they don't have to deal with bitcoins directly, but as long as they will be able to use bitcoins to pay some of their costs directly with them, it would change the current situation. But until that happens, bitpay and the similar payment processors will exchange the bitcoins and the circulation of bitcoin will stop at the merchants.