Such a scenario would make it harder for the central bank to control monetary policy, maintain financial stability, ensure low cost payments and enable financial inclusion.
"Financial inclusion"? Please. Bitcoin is the essence of financial inclusion. Don't have good ID? Turned down for a bank account. Don't have a fixed address? Turned down for a bank account. Bad financial history? Turned down for a bank account. None of that matters with bitcoin. Install a wallet, done. No fiat or CBDC will ever be as financially inclusive as bitcoin is. And "control monetary policy" is a nice way of saying "print more money". We've all seen the chart showing USD losing >95% of its value in the last 100 years. Now here's the one for EUR -
https://www.statista.com/statistics/1055948/value-euro-since-2000/. A cool 30% lost since its creation ~20 years ago. As the article points out, they are worried that the majority of the population will move to using bitcoin or other cryptocurrencies, which directly impacts on their ability to bail out themselves and their friends and prop up their rigged markets indefinitely.
This has nothing to do with maintaining "financial stability", and everything to protecting their own vested interests.
I feel that what you are talking about is the nature of the problem. Bitcoin is not worried about competition. Now the European Union or China is actively developing digital currencies. Their goals or official ideas are also obvious. Of course, the reasons sound very good.
The digital euro and digital renminbi（decp) are actually a natural world currency. It replaces the traditional currencies dominated by governments around the world and the actual circulation of physical gold. It also has the most powerful development space for currency payment functions. The function of the world currency is not affected by the fluctuation of any country’s paper currency, nor is it subject to the control of the dominant currency of any country’s government. It has a global circulation function, and it will play an irreplaceable role in the development of the world currency in the future.
What I want to ask is whether the land of fiat currencies among countries will compete with the land of digital currencies. Will there be a settlement system with a digital dollar as the core?
Regardless of development, as long as the digital currency issued by sovereign countries or regional organizations is centralized, or half of it is centralized, it has already broken away from the essence of the blockchain, and a perfect trust system cannot be established. This is the key, so it actually provides an accelerator for the development of Bitcoin.