.. Why people are comfortable investing in government controlled investments ...
I think it is because they are naive and think that governments are out to protect them when in reality the governments are there to control them and collect a vig from every person in each country. It gives them power and money, all the while allowing the politicians to control everyone else.
The government is not there to help.
You can't blame them because the assurance that their funds will not disappear overnight is there. So for those that don't want high risk investment, they opt to this route. They are confident that their funds are safe, even if it is controlled by the government. They are comfortable as they already know this market. However, if they are introduced with a new one, like crypto market, you will always expect some hesitations from them, because it is like uncharted territory and they are not familiar with the market.
This totally depends on the country you are living in. There have been a couple of surprises in the past when it comes to government backed securities or bonds. I know that Greece is not the best example because it was quite well known they were in dire straits, but that is one example for a government to go bankrupt. Often times people think that governments cannot go bankrupt because they could just print money. That is not the case for any government that is part of a union anyway, and for the other governments they'll go full speed into hyperinflation (Venezuela).