Why make it illegal if you could just regulate it and get taxes from people who make money with Bitcoin?
That's a whole lot of revenue for the government that they would be missing out on if made illegal.
But Bitcoin is actually also illegal in a couple of countries:
https://atozforex.com/news/top-countries-where-bitcoin-is-illegal/Yes you have a point, don't they even consider that government can gain fund from Bitcoin transaction via tax, it will help to progress some of the government project if they do so...
But I don't see clear valid reason why some country banned BTC....