If crypto does gain massive adoption and you are able to pay for things in crypto, there would be less of a reason for people to cash out into fiat. How would government collect taxes from crypto gains then? Also, if something like ETH becomes big, how is the government gonna stop people from making pyramids, ponzis, and scams in general?
I think that is the issue that government wants to gave a solution because they are looking forward on the use of cryptocurrency, in fact here in my country cryptocurrency has gain popularity, there has a tv series that has a scene of giving a payment and the person wants to be paid by cryptocurrency meaning people are aware of crypto and they are waiting for the right time to use it.