Specifically, they are grappling with the following three problems presented by Bitcoin in its current form. Bitcoin can circumvent government-imposed capital controls. Bitcoin is ties to illegal activity. Bitcoin is not regulated. All this are the major concerns of government not wanting bitcoin in circulation.
Below are the three major things that makes bitcoin looks like a threat to government:
* Governments around the world are eyeing Bitcoin's advance warily because it has the potential to upend the existing financial system and undermine their role in it.
* 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.
* Until the time that Bitcoin's ecosystem matures, it will continue to be viewed with distrust by established authorities.
By JAMES MCWHINNEY Updated March 19, 2022
Yeah, probably it has some truth,
* government still wanted their local fiat to flow normally or at least they have control of it. With bitcoin, everyone can hide their wealth and so government can't tax it
* others like criminals (terrorists, drug lord and others), can used it to transact without the government finding it until it's too late.
But as you can see, there are a lot of good use case for bitcoin though, not just the negative that the government see on it. However, mostly governments turn a blind eye on bitcoin and crypto in general.