Theoretically a government could declare a crypto-currency they issue as the new legal tender and offer an official conversion rate for people to exchange their old currency. The problem with getting this system implemented would be political rather than technical however. The current fiat system gives government total control over the money supply already, and cash has zero transaction fees (unless you send it electronically). Moreover the inefficiencies of the current system (ie the transaction fees) prop up a network of bankers that is highly intertwined within the governments of the world. Money and political power are never far from each other. Just look at how easily the bank bailout was passed in the US.

Adopting crypto-currency as the official currency of a country is therefore highly unappealing to governments because they already have the system that gives them the maximum of power over money and greatly benefits the most politically influential people of the world. The US can literally print its way out of massive amounts of debt over time. It can also acquire that debt at an insanely low rate through things like QE. And all the people who make money off of this system basically have the Congress and Senate in their pockets ready to write a check whenever they are in trouble. What makes crypto-currency uniquely useful is the fact that it can circumvent the traditional money system without the need for a centralized authority (read Satoshi's whitepaper).

Centralizing crypto-currency is trying to reinvent the wheel as a square and expecting it to work better.