Given that you are talking about the US and the FED...

I don't know much about blockchain and cryptocurrency - you could fill a thimble with what I know. I know nothing about Ethereum and Statis.

I am not a fan of the FED or the war machine that is controlled by the heartless minority pulling so many strings.

However, I think that no cities will "separate from the national currency" because this would mean that they would refuse to receive money from their state and the federal government. America's track record concerning anything that seems like secession is not so friendly. In addition, if they "separate", they will no longer be able to effectively participate in the local, state, federal and international economies, effectively isolating themselves from any entity which refuses to use that cryptocurrency.

I'm pretty sure that what will happen will be that a city will adopt a (crypto)currency to be used for the local economy, and the transition will occur over time. Anti-fiat currency rebels have been advocating local currencies for some time now, and I'm pretty sure that there are already small communities with a local currency being used for local transactions.

This brings me to my question. How can switching to a cryptocurrency absolutely ensure that the concerned citizens are no longer funding the war machine when they keep putting their children into it as soldiers, thinking that it is patriotic to do so?

It takes more than just a new currency to do to effect social change. At best, a local currency can, in theory, allow a city to try to create its own economic reality and provide the citizens with a buffer against the inflationary forces that keep devaluing the national currency, and send a message that the people are displeased with the destructive and corrupt business system. However, if the city is not self-sufficient (possessing all that is needed to sustain itself for the long-term), it will quickly find itself short of required materials, technology, resources, etc. How many cities can say that, were they cut off from the nation, they could stand strong indefinitely? What kind of economic and business program would be necessary for an isolated city to continue to thrive? What kind of governance would support such an agenda of bringing the corrupt beast to heel? A comprehensive program is needed, not just a local currency. Keep striving!