Every country can start their own cryptocurrency. These cryptocurrencies will be pegged to their own currencies. Governments will market them as the next big thing. They will assure the people that they have made better version of the currency based on Bitcoins.

Alas these currencies will still be controlled by central authorities. They will manipulate the supply of the cryptocurrency.

Bitcoin works not because it is a cryptocurrency. It is just a fad term. Bitcoin works because it is decentralised. It is bound by written rules in its code. It works because a group of powerful people cannot decide the terms of Bitcoin. Unless there is mass majority, Bitcoin cannot be changed.

Nobody owns Bitcoins. People own Bitcoins. Nobody controls Bitcoins. People control Bitcoins.

Government can launch n number of cryptocurrencies. They cannot beat Bitcoin because Bitcoins have strong fundamentals.