but I think banks will be subject to government regulations.
Always. If that happens, crypto will be regulated in that country by the government. It is not that difficult to do so. Just KYC the exchanges allowing crypto and monitor the users who are using it. When they see some tainted transactions that person gets into trouble.
in this case the government has the main role to adopt the mass, and the bank will obey orders from the government determined by law. hopefully the government will immediately decide to adopt this mass, given the rapid development of the human population
It will be bullish even if people may feel their skin crawl. As long as you are not doing something that is illegal you should be fine. There are stock markets commodity markets which are regulated and bitcoin will be a similar one.
It will actually get into control the bitcoin related cybercrimes that happen but dont get reported.