They can demand a higher price.
If you were converting, the state would have to exchange a set amount of currency/gold for a set amount of gold/currency.
Conversions for 99% of us are done by banks, and they charge a fee, and they set the fee price. If you are unwilling to pay the fee, you don’t get converted, so they wouldn’t have to sell you a state currency for fiat currency either unless it is on their terms.
Again, a distinction without a difference.