It’s not just story-technical. It’s also a connonical issue. The federation is, by al means, equal. Everyone is equal. Personal ambition can be achieved by merit. If you’d introduce genetic engineering (GE) in the mix, you’d have a system where personal ambition can only be achieved through GE. People are forced to GE thrmselves, or the’ll be left behind. The federation doesn’t need currency, but GE could become the new currency where only those qith the right and enough GE get the best treatment.
Latinum is chosen as the default currency, exactly because it is not replicable. In ST:Outpost there’s an episode where they find an alien tech that is able to replicate latinum, but only for a couple days before it dissolves. That is than used by ferengi pirates for obvious malicious reasons. ST:outpost is a fan production though, so not canon, but I do believe this is how it is. It is briefly mentioned in the apendices on latinum’s memory alpha page