the article is saying governments can outcompete Bitcoin by creating their own cryptocurrencies. However, unless they are scarce like Bitcoin, I don't see why they would be likely to beat Bitcoin in the long run. In other words, if a government creates a crypto coin but can still print money whenever it wants, why would people be interested in that? and if they do create a scarce coin like Bitcoin, then it will accomplish the same goal of Bitcoin, which is sound money.
Basically this would be like issuing fiat on a blockchain. We understand this is stupid, but most don't. The essence of government is control, so for them it probably sounds like a sensible idea. It allows them to retain their power, while also making them look progressive and fiscally responsible because it would save the economy money.
I think there is a really good chance we'll see this happen and it could even be a good thing Just imagine all the socialist sheep out there getting a practical schooling in economics because their favorite currency is being devalued meanwhile everyone else can freely choose to hold any of hundreds of decentralized currencies. So what I'm saying is that it might raise awareness and understanding of sound vs unsound money, etc.