You combined several incorrect things, El Salvador considered Bitcoin a legal currency like USD, but what Ukraine, Malaysia did is just adopt Bitcoin as a legal currency, which means:
- They can generate additional income by imposing taxes on those crypto.
- They can generate income by providing licenses to the platforms.
- They can generate additional income by providing the service of converting cryptocurrencies to local currency.
Imposing a ban on these currencies means that the government will spend more money to track traders, and this will not bring them any additional income.
Regulation is for economic reasons, which is different from considering it a legal currency
Please read OP carefully. I mentioned el Salvador made bitcoin legal tender and Ukraine passed a law for accepting bitcoin which clearly refers to legalizing bitcoin. Two are different things.
Imposing a tax on bitcoin also requires more money to be spent on this sector. Govt needs to track trader's records, transactions, and profits and losses. This consumes money and time too and is a decentralized cryptocurrency it makes things even harder. Recently India impose a 30% tax on every crypto asset and an investigation shows more than 700 Indian traders who made more than 40 lack INR which is equivalent to $52000+ USD worth of money didn't report about their earnings. That means they just simply want to avoid tax and just think how many more haven't been caught yet. Now implementing law and order to these people won't be easy.