Believe you me no matter how advanced bitcoin decentralisation might look or sound the government will never risk giving their citizens full control of their assets. The always want to be in charge and has long has they have this limitation of full custody stricter laws regarding Bitcoin usage might spring up. Technology is advancing
Regulation is inevitable but regulation is not always equal to restriction or banning because it all depends on the country and their administration. We have Bangladesh that has outright banned bitcoin and we also have El Salvador that has adopted bitcoin with open arms as legal tender. Then we have all the others in between.
We've had cries of an apocalyptic end and somehow, it has never surfaced. We often get to move past that as time goes on and somehow, regulations might seem impossible with the steps governments have been taking towards the bitcoin network but that too can stay far away from sight.
It's difficult for the government to accept that there could be something out of there control but, they also have to realise that the quest to be free is a part of human nature and humans would always seek that out when they find any sense of better some place else.