If this happens, will the value of Bitcoin go down because the government will make it available for everyone for cheaper value? What are your thoughts on your government distributing digital currency?
First off, government has centralized system. If they will be able to create their own cryptocurrency and blockchain, probably it was centralized and they will have control over it. And cryptocurrency is in decentralized form. This will conflict the real purpose associated with it's system.
Although, on the other point of view. Creating their own blockchain to improve their system, to make their government more organized and prevent some corrupt officials then there are still good side of creating their own blockchain.