Neither bitcoin nor paper money has any real value, but notes have national credit support, and what if bitcoin also gets national credit? The government will lose its macro-control policy but it can also effectively eliminate inflation, two relative ratios. Is that a good result? Of course, I know that the government is very unlikely to support bitcoin, but who knows?
Cryptocurrencies runs on blockchain which consist of complex algorithms that makes it hard to regulate or control by an istitution easily. This is the reason why Bitcoin and other cryptocurrencies was impossible to control by the government. Maybe they can support it in a way that they don't banned it in their country but not in a way that they will regulate it because if this happen the price of cryptos will now be much stable and not volatile.
They cant easily trace bitcoin transactions thats why they didnt want to support it. It will be a big problem for them to legalize this one, many hidden transactions will be made out of control , even the fiat they cant even control the economy , so what if bitcoin will be legalize right? Also many banks will adjust too as well as all the country law.
Exactly, the process for controlling and monitoring transactions in bitcoin so far is too complicated, even if the government knows the address to which Bitcoin will be delivered, they are still unable to pinpoint the exact location and impose taxes and costs on that process, deeper, implicit transactions like you said can happen a lot, bitcoin support is public crime support in this sense. Therefore, the support from the government for bitcoin is only the cost of reference and research, application and support is completely impossible, they are standing at the perspective of the future of a nation to decide