But it's time tested. With Bitcoin there's a lot more variables of loss that the government can't control with their army. If they can't, they won't trust it.

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But they don't view crypto as a viable alternative as most governments don't wanna let people use crypto which can be hard to tax.
They might run other cryptos that they agree with. Like xrp or whatever shitcoin which they agree on. But on Bitcoin, it's something they can't control.