Bitcoin without PoW has no value. It's the entire reason it works. Without expending a finite resource to produce another, you can't constrain a money supply nor prevent it from attacks.

Governments would be unwise to ban a voluntary system for the same reason they don't ban any other uses of energy that people question the value of (there are plenty). In any case, it will not stop, only move. If not to another massive farm in a favorable jurisdiction (that could be captured) then to smaller sections where it is unidentifiable.