India’s central bank is shutting the door on Bitcoin and other crypto-currencies

I love the Indian govt. So shortsighted. Something like bitcoin cannot be killed by them singlehandedly. Similarly, with big players like Russia and USA potentially playing against each other, it becomes a game of prisoner's dilemma.

This kind of dilemma exists in despotic and dictatorial govts regarding the Internet. If they don't let their people have access to Internet, then they risk being left behind and potentially weakened against their enemies. If they let their people have the Internet then they risk getting their populace awakened.

I guess India (and other countries) could issue crypto-currencies, but wouldn't that kind of defeat the purpose? Of course, states would add features to make the transactions traceable. Would anyone use them?