Some may fear that a government-issued cryptocurrency would eventually supplant Bitcoin. This is absurd. It merely substitutes a blockchain for the wire transfer of a fiat currency. It precludes a really free exchange of value between any two random locations on the planet without the intervention of a third party. A government-issued cryptocurrency will inherit all of the fiat currency's flaws. It will squander energy as a result of perpetual inflation and regulation.
What are your thoughts regarding this matter?
I think rather than replacing them, it will actually draw in a wider audience who are likely to go on and buy cryptocurrencies that are not government issued. It'll give people a useful introduction, removing an element of fear that some people will refuse to put into something new and it'll help even more if the government encourages uptake by issuing "free money" like we saw happen with El Salvador. People know that governments will often screw them over if it's possible and most government backed crypto is likely to give them the ability to add extra circulation at will - this will only create more upside for other fixed total currencies like Bitcoin which can only be eroded downwards instead of inflated upwards.