No. This means the government will regulate it. Regulating and controlling are not the same thing. For instance, if a government passes a law making certain cryptocurrency mandatory as payment methods for vendors, then it does not mean they control them.
In the previous centralized system, the government issues money and controls the monetary policy. In this new system, this power is taken away from the government and given to the public. People now have the freedom to choose which money is the best.
You're right, Bitcoin is a Decentralised monetary asset and was designed in a way that it can't be influenced by the government and other centralised sectors, making it difficult for the government to have control over it's volatility, the least they could do is regulate and track down citizens or officials that use it for criminal activities. Most people think because it decentralised then it's not traceable but Yes, Bitcoin can be traced due to recorded blockchain transactions which are set down on a public ledger, making it easy for authorities to make analysis concerning the address used for criminal activities.
Well that's one of the reasons I think Satoshi created Bitcoin, for everyday users to adopt it as a means of transaction and other financial activities for now Bitcoin is not here to replace the fiat currency cause it's not vastly adopted around the globe, but was set aside as an alternative monetary asset which cannot be manipulated by the government and can be used to carry out quicker and faster transactions without any third party.