🍅Not a tomatoe-tomato situation
If the volatility of a"govcoin" will be controlled by an institution and it's supply regulated to influence inflation rate, investments etc. it will be more like a normal fiat coin with a fancy blockchain accounting underneath it.
Don't get me wrong - it might be a step in the right direction and it is very probable that some sort of a human-centric regulation of a cryptocurrency is needed - but I see it more as an alternative solution than direct competition.
I was actually thinking that same thing as I asked my question. On the one hand many buyers of btc are buying it as a store of value as opposed to a coin with any real utility. In that kind of environment, perhaps govcoin could be used for most transactions while something like a bitcoin could be an investment coin.