A topic not well discussed in the crypto world, government benefits from cryptocurrency use... Largely because many crypto advocates have the belief that they can somehow take over monetary systems like some sort of revolution. Hard to imagine a world that bad; where a bunch of Bitcoin whales become the oligarchs of the privatized country run of willingness to pay for previously public service. Back in reality the utility for cryptos, and them becoming the financial backbone, is one of the best things that can happen to a government.
You are likely familiar with Coinbase; or another custodian of cryptos. Even your cold wallet is a custodian in a sense, as it needs to not be burned in a fire since you likely can't remember the private key off hand. The most important factor to consider is that there's a cost to playing the role of custodian; short of straight memorization of private keys. You knew that, but how often do you think about the cost of custodians of fiat? Sure, you know that banks are staked to benefit from freeing up assets and moving money with ease on cryptos, but the government is the ultimate custodian of fiat; which is mostly digital.
How much time and money is spent on being the custodian of fiat? How many laws are there for banks compliance? How much tax money goes to regulating MSBs*, so we can still pay more tax on the use of the money that we already paid to be regulated? Hopefully a picture is forming. If you understand cryptos you can understand how an immutable ledger has extraordinary potential to alleviate pressures of custodial actions on fiat; that cost the average person money not only in taxes but MSB fees too.
Is it even possible for any government to be uninterested in the ability to free up resources that could be allocated to more beneficial uses for it's citizens and self? It's like asking a parent what they could get done if their kid was nearly perfectly-desirably autonomous. What potential does this have for countries that are struggling, when innovative ways of improving them are held back by regulations in place? How much weight could be unshouldered by converting to a crypto system that can clean-out hordes of corruption & waste? If a government adopts a crypto that is decentralized they get the legitimacy of many thousands of nodes, in countries that are stable, and the security of each one. That adoption supports their local fiat in bad times, and can even circumvents the need for paper money when it isn't available - through smart technologies available on phones & computers.
In China they would need an extensive overhaul of their entire problematic-near-implosion banking system to provide service to all the people on WeChat – which transformed from a chat program into an independent digital currency system because the government hadn't been able to form accessibility & practicality of regular banking for all it's citizens. But WeChat isn't even a decentralized digital currency or based on blockchain technology, and it has been adopted as a circumvention to traditional banking, in mass. The same basic thing is happening in Africa - where banks suffer the same fate as everything in Africa, some form of “corruption” that spawns micro-economies or turmoil from ever changing government & global economics – mobile digital money has emerged. Essentially both China & African people have found a way to keep business going for the people that need to sell & buy things for daily life; in an otherwise adverse, constantly changing, setting.
It is unlikely we even know the extent to how far and useful cryptos can be for governments. They at least have the potential to benefit the tax payer and the fiat custodian. What can they do for the debt? At least make crypto nodes be our redundancy, not how much legal tender we have to spend to use legal tender. Consider that different entities within the government are already exploring the use of blockchain technology, before you go head-over-heels in belief about how the government is going to respond to cryptos in general (taxes, regulations, etc).
*Money Service Business