Bitcoin is ties to illegal activity. Bitcoin is not regulated. All this are the major concerns of government not wanting bitcoin in circulation.
The major concern of government not willing to accept bitcoin is that bitcoin is not regulated unlike fiat currency, government can decide to print more fiat currency into circulation at any moment, government can easily monitor our financial activity when it comes to fiat but they can't do that when it comes to bitcoin.
* In its current form, Bitcoin presents three challenges to government authority: it cannot be regulated, it is used by criminals, and it can help citizens circumvent capital controls.
It's just kind of annoying to me whenever I see people thinking government have refused to accept bitcoin because it's used for illegal activities, government said bitcoin is used for illegal activities but that's not the reason why they are not accepting bitcoin, the main reason is that because bitcoin can not be regulated, government those not want a currency that they won't be able to control, they don't want anyone to be financially free that's why they are against bitcoin.
If government claim that bitcoin is being used for illegal activities, then I will like them to mention the illegal activities that bitcoin is being used for that fiat currency is not used for. Any illegal activities that bitcoin is used for, then fiat currency is also used for it, so why are they not against fiat currency.