The process will start by upgrading the local fiat currency to a blockchain based cryptocurrency, accompanied by tools like transfer, exchange, taxes, KYC, AML, reporting…
A currency as a cryptocurrency has many advantages and will — from my point of view — change economics fundamentally.
It definitely will. And not necessary in a positive way. Governments all over the world are trying to eliminate cash and shift residents to e-money (whether blockchain or bank-based). The motives behind these are simple
- Increased surveillance over what you do
- No leakage of tax revenues
- Implementation of policies like negative interest rate or demonetization
This is actually the diametric opposite of what decentralized cryptocurrencies like Bitcoin set out to achieve.
To me, that's exactly why I think it's completely absurd for anyone to go with a government issued coin when you have the alternative of working with decentralized cryptocurrencies, like bitcoin. The blockchain technology is only used to exert even more control over the economy, to further the surveillance on your spending etc. that were not previously possible with cash, have a more direct impact on the economy, or to freeze assets directly.
That to me is the scary aspect of centralized cryptocurrencies.
But a lot of governments are already looking to implement their own centralized versions of cryptos, and I don't think that anyone can stop them. The push for a cashless society and increased control from the government will be furthered using blockchain technology. But I'll keep holding onto my bitcoins, thanks.