That fear makes a big loss from a country because unpredictable prices create anxieties to the government and fear of future losses.
The government can also regulate the market and the price volatility will be reduce.
It's its nature that it's unpredictable, its because people are trading and the demand will increase or decrease, but with regulation, price manipulation will be eliminated.
The government is not able to regulate the cryptocurrency market in order to reduce the volatility of the cryptocurrency. Yes, and it is not interested in this.
As for banks, they will work as they have worked before. Cryptocurrency for them is not a significant danger. States will defend the existence of their banking system, so there is nothing for banks to fear.