Bitcoin don't need a physical location and I don't see any good reason for them to do this, but the government is very good at one thing though, that's taking advantage of the public's fund, if they are creating a Bitcoin bank then it is for no other reasons than what they have been doing before.
Who would dare use banks for Bitcoin reasons? Anyone here? Because it can never be me, a physical Bitcoin bank breaks all the reason why Bitcoin existed in the first place, peer to peer, decentralisation, etc. You must be dumb for such thing to confuse you enough and trust your Bitcoin with the banks.
I could totally say this new Bitcoin bank was effectively a good idea at some point because it will make a lot work more easier for many who do not understand the crypto currency to come receive their funds stress free. And truth be told this could also attracts more crypto investors and many individuals also.
But other way round it brings a lot of risks along side it because the market is full of ups and downs and bitcoin market can be unpredictable at times so many citizens who does not fully understand the crypto space will be left in regrets. They should try focus on more education and security for the benefits of other.