As far as I can tell, this is purely a Google thing, not a government thing. The cited laws apply to money services, so something like a custodial wallet would

As far as I can tell, this is purely a Google thing, not a government thing. The cited laws apply to money services, so something like a custodial wallet would count, but a vendor that just makes a local crypto wallet and never touches your money doesn't fall into that. Google has simply decided to ban more than necessary "just in case".