This is highly dangerous for the freedom of the world. When governments issue their own currency,it wouldn't be any different from fiat with the exception of being fully traceable resulting in total elimination of financial privacy.

Governments will simply outlaw private currencies and make fully traceable FEDcoins. Without money, you can't do anything. With a push of a button governments will be able to steal everything you own. You wouldn't have to pay taxes; governments will simply confiscate whatever they want.