That would basically defeat the purpose, BTC is supposed to be a decentralized currency, and if government issues it, there will be heavy regulations and it will be centralized, controlled and issued by a central banking authority. Indian govt. was planning to do this with Lakshmi Coin but the buzz just drowned, so I guess it is no more.
I think that is a strategy from the government that tries to make the price of bitcoin fall by giving a statement like that it will make many traders panic, while those who already understand bitcoin should not need to panic so stay calm and enjoy bitcoin price movements and as much as possible to looking for very much profit.
I wish it was just birds news, hoaxes or something else. I imagine who is the government developer who will make a cryptocurrency? of course they must form a new bureaucracy, and from that there will certainly be jealousy from the bank and the local currency itself, too complicated to make it real..