They can't, crypto isn't a stable asset it's highly volatility and far different from money, it's going to be hard to see crypto and medium of exchange really because the volatile part doesn't guarantee anything
In all, I believe that is the major issue cryptocurrencies have when it comes to seeing it as a means of exchange and on a positive note, why people are more into crypto. If there was no volatility in crypto, there wouldn't be the king of profits that investors get from it and wouldn't have been investing in it that much. So, what is a positive for crypto investors is what makes it difficult as a means for exchange hence, it is different from money.
Yes, it's one issue to the banks.
A highly volatile asset can't be accepted by them and most of the banks aren't really looking forward in adopting cryptocurrencies with their services.
But there might be some open-minded banking management that shall adopt this soon in the future. The crypto market is showing unstoppable potential and growth so they won't ignore it.
If bitcoin was anything other than a currency you can be sure that they would have adopted bitcoin already as it is widely known that banks have no problem investing in all kind of speculative assets as long as there is the potential to make a lot of money, the problem is that bitcoin is a direct competitor to their business, and not only it is a competitor it is probably the biggest competitor that they had to face during the last centuries and they do not like this one bit.