Each government has different jurisdiction and government protect against fraud which is the bank was under by the government and banks are regulated by the government, they should always obey the government's law and regulation either. There's no way to challenge the government, it is understood that you should obey once you are a citizen but if not, you can move into other countries that never care about people, which is very common to have crimes every day because there is no government that has protected people.
Exactly banks have complex regulations not only under the governement of a country but also under the world banks. And world bank really has a big power to do many things.
Fiat banks are centralized systems.
And they will also not let decentralized bank systems to defeat.
We have seen in many countries where cryptocurrency and also decentralized finances are against the government because they cannot control them. Yes, that is why the government will still maintain fiat banks whatever happen because they can regulate and control the banks. And moreover right now there is issue of Cbdc that can make a country have more interests
In principle, cryptocurrencies and decentralized finance can get along quite well with fiat banks and there are no insurmountable contradictions in this matter.