It's good that a sparsely populated country like Iceland had understood the possibilities, while major powers are still skeptical about it!
The news only stated that Iceland's crypto industry will shift from mining to pure blockchain business and it is not stated whether the government supported their decision or not. It also did not tell whether Iceland's government itself is skeptic about it or not. Either way, this is still good news since the companies mentioned in the news are prominent companies after all.
That's true! But without the government's support how such big mining operations are ongoing? There must be some kind of support is behind such big operations. To start such a business, a company needs to have different arrays of licenses and certificates from the government. I believe if the government has supported them in getting those licenses, there's at least some kind of support available for them!
Also if the government sees that such blockchain based industries are generating employment, increasing their revenue through taxes and overall helping to cause of the governments, they will certainly come out with a positive policy, if it is not already available.