If banks and governments create their own cryptocurrency, will the people still be the ones to give value to it like Bitcoin and will we be able to store it in our own ledger to protect our own money?
Firstly, this is a very radical and anti-democratic move, so they would think over it twice or more before implementing. It would usually mean the government does not want bitcoin but they want their own state-coin.
They can evaluate the current fiat value and use a cryptocurrency that is equivalent to that and use that for the people to spend. However does this even have any effect on bitcoin? No because it becomes a completely different entity, just another version of the fiat. But only if that currency is exchanged for bitcoin and there would be market for such then the situation would become different.
Democratic countries might not be actually doing so even if they talk about such. After all morons are always putting up absurd claims and bills and then revoking them. What actually happens after Mr. Musk has pumped bitcoin is worth watching.