They would have banned Internet fiat banking because it is prone to hacking and used by scammers. The government wants to put everything under their control so that they can easily manipulate the people.
The media hardly talks about fiat fraud, it is always about crypto fraud, spreading fud in the hearts of people that BTC is a scam, just as you can lose your money in fiat is the same way you can lose your money in BTC, the only difference is that stolen fiat is easier to track than BTC, especially when it is used with privacy solutions like mixers and CoinJoin implementations. I agree that the government loves control and that's why they'll never support a decentralized system.