They have to be careful because they won't be able to collect taxes. There are 2 types of taxes. Direct and Inflationary.
The second one is gone because control of money supply is gone and as far as the first one the govt can trace funds in your bank accounts but it's going to have a really hard time if someone holds crypto currency and is intent on not disclosing their real wealth.
>Why do they have to be careful? Are they going to magically going to have to start accepting Bitcoin instead of dollars?
There is zero chance bitcoin with it's current network is every going to be used as money. What might happen however is that more and more transactions could move towards other networks like nano or various stablecoins that are built on top of smart contract platforms.
If governments end up issuing a currency that is only useful for tax payments then they have effectively lost control of the monetary policy. And in any case banning crypto will only help towards redirecting monetary flow towards other countries. So in many ways governments' hands are tied in this.
Why do they have to be careful? Are they going to magically going to have to start accepting Bitcoin instead of dollars?
> Bitcoin was very carefully crafted to survive government attack and finally the government accepted it by considering it a taxable commodity.
They still doesn't mean you can pay taxes with it.