I don't think that China will ever call the bitcoin a legal currency, but a time will surely come when China will have to trade by buying bitcoins from the world. Because how long can China trust banks? As the banks may start printing a lot of money which will increase the inflation and people will be forced to move to Dogecoin. If this happens then everyone will be forced to accepting cryptocurrency and The inflation of the dollar will be as much as the amount of tokens like Shiba Inu.
It has been like that for a long time. It is a big threat to China because what china has a dictatorship and what bitcoin promises is a decentralization. Decentralization in a dictatorship doesn't work out well. So, we should not really be shocked to learn that China trying to impose sanctions on BTC, why would they really care about something that would give power to people? If they were a nation that gave power to people then they wouldn't rule like this to begin with.
People all around the world is scared of CCP so it is not a shock that they would be putting rules against freedom. Maybe Scandinavian countries and all those type of places would end up giving some sort of rules about it that supports crypto, because they are as free as possible already.