I do agree that tax could be one of the biggest reasons for this. After all if you have a national exchange, you can literally cut the tax right out of the account in the exchange without needing any extra paperwork. That would mean that anyone who uses this, is forced to pay taxes by just simply using it. That's why it looks like it would make sense, for the government of course not for the traders.
In the end, I am guessing that it is going to be a bit of a different situation, like such as people trying to find other alternative ways to get bitcoin, because when government does stuff like this, there are majority who uses it, but there is a minority that wants to find another way without getting caught and pay that taxes and give information.
I know right, maybe this makes crypto more centralized but at least people have peace of mind when gov regulates crypto in a good way. and its just like a win win solution government have their money and people can easily exchange crypto.
Indonesia that I know had lot of Centralized Exchange and according the Tripe A survey that "It is estimated that 12 million people, 4.5% of Indonesia’s total population, currently own cryptocurrency.¹" -
https://triple-a.io/crypto-ownership-indonesia-2022/