Bitcoin is so much superior to any fiat that they're afraid of it because as soon as people will understand it, they will dump fiat for good and never look back. But the truth is people are a bunch of easily manipulated, brainwashed, propaganda puppets. They're waiting for the government to allow them to use it as legal tender (like El Salvador did). Only then global hyperbitcoinization is possible.
Not totally superior because there are still things that BTC can't do but fiats can do therefore they shouldn't be scared of it. The reason why some bans is not because they are scared of it but because they can not control it. As of now, many people already know and use Bitcoin but they haven't totally dumped fiat for it.
Fiat is still the one that they use as a medium of exchange and Bitcoin for them only works as a long-term investment and for trading. As long as Bitcoin is allowed in our country for both asset and currency use then we can now use it for buying directly or paying to avail of some service as long as it is also supported by the merchant. There's no need to wait for BTC to become a legal tender as that can take a long time to happen.
The government will not adopt or accept anything that is uncontrollable and unmanipulative just like Bitcoin. So we can't blame them for banning crypto or for not supporting it because they know for sure that they will be doomed if Bitcoin will take over fiat. However, fiat will still be the priority of the government and as much as possible, they will cover their eyes so they won't see how Bitcoin could really help. I hope that they will resist and try to consider Bitcoin in the future despite being decentralized.