Regulations by  government is itself a step towards centralization where permissions would be needed for any type of transactions either by filling KYC or by any other methods. this will create boundaries and barriers in terms of international taxes being levied and checks by these fiscal bodies. This will further reduce the  transaction time of transfers for which the blockchain technology is known for. Goverments in each country is influenced by their banking system and the corporates, and these bodies can put extra pressure on the government to increase the regulatory framework. And if these regulations will start in each major countries then the holistic concept of decentralization is jeopardized.