I just think they will go full blockchain without touching bitcoin. So they will create their own cryptocurrency (government-backed)
And I just think it will work. But I think it will not damage bitcoin.
If they create government back crypto currency, is that backed by one government or multiple governments? I do not think all the governments can agree on the single currency.
The bitcoin is the currency. Banks might create tokens to use internals, but they do the inter bank clearing, they will have to use bitcoin.