I think such a scenario would be a gut-check for many of the core supporters of cryptocurrencies.
I think the majority of crypto investors, or at least investment money, could care less about if it is a government coin or a decentralized coin. Do you think average Korean or Japanese crypto investor cares if it's fedcoin or Monero, two coins with very different philosophies? Unfortunately, probably not. Most are in it for the money, and will be more than happy to jump on the bandwagon of a new gov. coin as long it promises returns over the short term. I fear this as well.
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Indeed, I've sold most of my ripple for this reason, and will eventually dump all of them during the next upward trajectory. See, I'm a bit guilty of this myself...nevertheless, I no longer want to support projects that will lead to government/corporate oversight and interference.
Fedcoin is coming at some point, but I don't see it for a while. It will be funny to see Maduro's petrol project go up in flames though.
I agree on the Petro currency. It might have a chance if it was backed by oil or whatever other physical asset they plan on using, that was already extracted from the ground. You'd still have to trust the Venezuelan government that the oil they say is backing the coin is actually there, but it'd be improvement. One of the major problems with it in it's current form, is that it is backed by oil that is still in the ground. The owner of the Petro coin has to rely on the government and it's employees to extract the oil, and that is far from a sure thing in a country that is on the brink of bankruptcy and in the midst of hyperinflation.
I agree. 90% of current investor bought in because prices were going up and they thought they could make money. Nothing wrong with that, but as you suggested, they won’t care what coin it is. Most people have no idea of the use case of what they are buying (as most coins don’t seem to have one)!
I should add that the average crypto investor in the states or Europe probably would not care either, though we may tend to take a more decentralized or freedom based approach.
It's possible that there are some investors who will ONLY buy into cryptocurrencies that are backed by governments because they fear the risks of decentralized coins.
A govcoin wouldn't be a good store of value, it can be inflated any time, just like the underlying govcurrency.
Governments/central banks would be those buyers, along with institutional investors.
But governments can’t manipulate currencies because democracy.
For example, look at the United States.
The United States government has absolutely not, even a single time, in any way shape or form, in any manner, ever, manipulated the U.S. dollar.
Because democracy.
are you kidding?
Fortunately no, I’m not kidding.
Look at how the military dictatorship of North Korea manipulated their currency in order to artificially pump their corrupt housing program, the “Financial Assistance for the New National Interest and Existing Market and Aftermarket Economy,” (known by North Koreans as “Fannie Mae”), which gave kickbacks to the ruling caste in North Korea.
Well when that caused the North Korean housing bubble to burst in 2008, further manipulation of the North Korean money supply by their totalitarian regime allowed for the housing bust to actually cause a years long, full-blown recession throughout all of North Korea that is still hurting its citizens to this very day.
Nothing even remotely similar to that in any way could ever happen in the United States.
Because democracy.
LOL!