Let me say you are thinking about crypto far better than most people I know. You are asking all the right questions.

Also a crypto that does not have an intrinsic value is probably not gonna cut it. Only intrinsic value digitally, is computation and storage power. So a crypto that is implicitly backed by computational power - a distributed computational network, for instance - is probably one way to do this. The governments can purchase cryptos on this network to run their infrastructure, using their assets as backing - making it a true asset backed crypto with intrinsic value.

You are spot on Encryption. The only solution, honestly, is a off-world technology that we will never be able to crack. Probably something very esoteric.