Many countries do not want to legalize bitcoin as a legal currency and means of payment where the government continues to try to limit its use with various regulations. I don't see why governments are so concerned about bitcoin and its use case as a means of payment, it's not like a real threat to the future of fiat.

So far, bitcoin is associated with cases of illegal transactions as well as several unlawful acts such as drug trafficking, money laundering and the like. Though it is not something new even though bitcoin does not exist. Fiat have a bad reputation and it was completely centralized compared to bitcoin, but both are currencies that can be abused. It's just that bitcoin is a different kind of currency with a number of great innovations compared to the fiat system.