It is obvious for a government to force merchants to use it's blacklists, just pay to a merchant with tainted coins for what seems like a regular purchase and then see if he is going to report it, use fines and so on if merchant didn't report it. And before you are going to resort to the usual argument that democracy will sort it out, Bitcoin was created in the first place because democracy doesn't work in the matter of regulating financial system, majority of the people can't make an informed decisions about the matter, otherwise we wouldn't have Ben Bernanke printing money or almost legalized theft from Cyprus bank accounts. Bitcoin can bring free market into financial system, in free market smart individuals who get it right take all the benefits even if majority think they are wrong, they will be able to invent useful services and continue their work if there won't be majority of uninformed people standing in their way.