many are actually interested in bitcoin just because it is decentralized and stay away from most altcoins because they are not. a government/bank issued tokens may be good and it may even make the banking system more efficient or even safer but none of them will be the cryptocurrency movement to decentralize money transfer.
Even if government switches to blockchain it will not be a decentralized currency which will again be in favour of bitcoin which people like it for being decentralized.
I think the government also realized a lot of people are already into bitcoin and the technology is much modernized and faster if they use blockchains, but I really think they will secretly hold bitcoins too aside from creating a cryptocurrency. A lot of investors have realized the use of these coins and decided they'll just join them instead of going against it. It's also a form of tactics on their end.