I keep seeing people say things like "I don't understand why you would put your bitcoin in a bank". I think you are misunderstanding what a bank can do for people.

Most people HAVE NO BITCOIN.  Most people do have collateral. A bank is able to judge the credit worthiness of people with collateral and loan them bitcoin. It would be a way to buy a house and have a mortgage denominated in bitcoin.

The value of banks is this ability to judge credit worthiness and give people who have no bitcoin access to bitcoin. The banks are willing to assume the risk. They are willing to pay interest to people who trust them and deposit bitcoin in banks.

Now banks are risky, but that is balanced by enormous value. Consider the biggest risk with banks based on fiat. It is that the central bank will print enough hard currency to debase your money. This can't happen with bitcoin.  Each bitcoin bank has to manage its own risks without the expectation of a bailout from the central bank. I bet bitcoin banks will be much more conservative and trustworthy than fiat banks.

I would think the bitcoin community would welcome banks. They would enormously increase the worldwide use of bitcoin and bitcoin value would rise accordingly.