If the state prohibits the existence of this bitcoin it will narrow the bitcoin space. Bitcoin can not develop well in that country. And bitcoin is very good and profitable for those who know it.
I would rather bitcoin is set by a country. All consumers will be more secure, because there are parties that protect consumers.
If bitcoins are free throughout the country, what I fear is the game for rich people and bitcoin abusers in negative or criminal matters.
As of now there are 11 countries that banned bitcoin. But this is only a small number of countries since many countries have started to appear and is studying on how to accept bitcoin. Though there are regulations that are already being set by the government such as the KYC, AML and the taxation but this actions will not stop bitcoin but will restore the trust of the public to bitcoin. Soon a huge number of masses will be marching and join bitcoin.