Countries are not afraid of Bitcoin, it's just that every country has rules of the game regarding currency issues that they apply to buying/selling transactions, the government owns the people, of course they need accountability for all forms of income and expenses publicly so that their people know that the government is honest and fair to its people.

You know Bitcoin does not have legal owners, managers and physical, not the same as fiat money in general, Bitcoin has a high value when making transactions, what if the country adopts Bitcoin as a whole and applies it as the main transaction.
I mean, if the state treats users using Bitcoin to buy a bunch of vegetables, of course this will be a hassle, Bitcoin transaction fees are more expensive than the price of the vegetables you want to buy.

For this reason the government is not afraid of Bitcoin, it's just that Bitcoin cannot be used 100% in daily shopping needs, Bitcoin is very efficient to use as a digital currency which is based on investing, mining and trading in the crypto market.