You have that backwards: creditors can take possession of debtors' property if the debtors fail to repay (in terms of fiat currency). Basically, whatever currency the courts deal in will be the preferred currency of creditors, and by extension of debtors.
No, if I borrow your car (as a loan, with 100% interest) and refuse to pay it back, the court can seize the one car car, or order me to pay restitution in dollars. If I offer the dollars, it can't compel me to produce another car or give you a piece of my house instead.
"If I offer the dollars, it can't compel me to produce another car or give you a piece of my house instead."
Sure, but if you cannot (or simply do not) pay your creditors with dollars, the courts can give them a (figurative) piece of your house/car/computer/etc.:
Yes, figurative. A lien is an attachment, payable in DOLLARS when the encumbered item is sold.
Siezing property happens as a last resort, but doesn't undermine the fact that a debtor can ALWAYS choose to settle a debt in dollars, and can NEVER compel the lender to accept payback in gold or BTC or potatoes.
The other comment is not quite right. Suppose I break your iPad without permission. This creates a debt for the cost of replacing it and the incidental losses arising from its absence. If I offer the appropriate number of dollars in repayment, the debt is cancelled, even if the payment is refused.
