The "crypto as an alternative to the traditional banking system" narrative is a joke. World governments don't want you to have independent currencies. If you're in charge of running a government, why would you want your populace to just invent a money and use that instead of your own? But, I don't think it's something that most governments desire to outright ban, either. Governments stand to make some nice tax revenue on the gains realized in trades. Some business models can benefit from blockchain technology. And exchanges stand to make money even on just trading fees, regardless of price action. Investment firms across the world have their own strategies to generate profits. So there are good incentives to not ban it.
The strongest arguments I think for banning it are to combat the dodging of taxes, capital controls, and sanctions. As well as fraud. But there already exist methods to track crypto and people down for these crimes, and those methods are constantly being improved. Plus, these issues already exist in the traditional banking system so it wouldn't make sense to arbitrarily not let people use cryptocurrency.
Crypto really is just an online stock and commodity market. Everything is priced in your local currency (some people will price things in other cryptocurrencies. nobody really cares about that though.), and when you buy and receive coins or tokens, those are either commodities, or securities. For example bitcoin is its own commodity, and PAXG is a representation of gold (a commodity) that you can redeem. You can go out and buy tokens that give you -most- of the same kinds of rights in the issuing company (or in this case crypto project) as company stock. You can buy tokens that give you better fee rates when exchanging various cryptocurrencies on exchanges.