I think government need to study more about bitcoin and how it works. Because bitcoin its not easy to use an entire city that that they not study about it. And maybe they not adop bitcoin because some people are not use technology and they don't know how to use modern technology.
Yeah, governments needs to integrate Bitcoin and Fiat in such a way to use it together. It should be in a way that both fiat and digital currency work side by side with no loss in government revenue.
and that they will be the ones to dictate how many bitcoin would be in circulation and what policies it must follow. But with bitcoin still in its infancy stage, this might not happen in the near future as most countries still depend heavily on fiat.
That is an absolute correct, for me at least. The government would not let bitcoin to surpass fiat. Fiat will remain as their major form of transaction and payment. And if the government agrees to take bitcoin as an alternative then bitcoin and fiat will surely work together side by side. However, I do not know how the government will dictate how many bitcoin will be in circulation in their economy since they cannot identify who uses bitcoin and how many bitcoin every users have.