in my country. Bitcoin is allowed to be traded. Bitcoin has been legalized as an investment just like gold. However bitcoin is not allowed to be used for payments. Because the only currency allowed is rupiah.
What the government is doing that only allows fiat currency for transactions is the right thing, of course it will cause a lot of problems if the function of bitcoin is equated with fiat, the presence of bitcoin is to improve the world's transaction system but will not be able to replace fiat currency.