From my point of view, regulation can help the crypto-currency world to start a completely new frontier in its development, but the only other thing is that crypto-currencies today have very great opportunities in anonymity, but this problem will soon be resolved.
I agree with you, to completely implement cryptocurrency with support of the government it really needs to have regulations. Regulations helps government to accept the technology and assist that it can't be used in the illegal transaction. It also helps people and government understand each others in using the technology. For me, regulation can provide security and safety both government, people and the technology.