That's how government works. They tend to control everything especially when there's money involved.
Government didn't force these exchange to implement KYC verification, it's a way of regulating it and the government set a policy/rules to prevent fraud. The Exchange could actually refuse the KYC verification but it might need a lot of explanations and paperworks why they want to contest the regulations or else they can operate illegally.
That's the main role of government, creating rules and regulation and imposing it to the people and following on the legal rules applied is mandatory so it would be impossible for a central banks regulated by the government to go against the policy even if they seemed to be open to accept crypto transactions. I maybe less thinking that the government wanted to implement rules just because of they wanted to have a full control on digital finances but having a full control for the safety of the people and the finances of the country is their main priorities.
Exactly. The government should always look for the welfare of its citizens so they tend to control all the activities particularly with money involvement to avoid fraudulence and scams but sad to say in some instances the government itself creates fraud. That's how government works, not just to protect our own interests but also to protect theirs.
However, with banks go against the rules of the government, i don't think it's possible even if some really want to. Banks have no choices so they should always abide with the government's rules if they want to continue serving the people and continue operating legally.