Conflict:
Banks are concerned that crypto could reduce the use of fiat currency and reduce their revenue from services such as credit cards and loans.
Banks are concerned that crypto could be used for illegal activities such as money laundering and terrorist financing.
When crypto is used in a country the country's bank does not decide it but the country's government decides whether it should. There are many countries who know that they cannot control Bitcoin if it is accepted as a currency in their country so the country's government does not provide legalization. Again, governments don't use Bitcoin because they think their domestic currency will be threatened because it's decentralized. But many countries have legalized cryptocurrencies and they have achieved financial prosperity but many are afraid to do so and do not legalize bitcoin or crypto because they think their local currency will fall.