Not because they think it will facilitate otherwise illicit activity. Not because they think it poses a security risk, or puts citizens' own finances at risk. Their openly stated justification for banning bitcoin is "if we don't ban it, people will use it instead of our money."
Or, in other words, "we can't compete."
They may not have heard the saying that starts "If you can't beat them...."?
I don't think it ends with "ban them".