How would they ban self custodial wallets? I can't think of any way, other than forbid transactions with Central Exchanges and Banks.
If you mean: how could they enforce it, then they couldn't, generally.
The effects of an unenforceable ban are to create a culture of fear through occasional, high-profile, and usually extreme enforcement. I assume that such a ban, in this case, would go hand in hand with laws regulating contact w/ exchanges and banks, as you mention.
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