Though its easy to see why governments would want to regulate the movement of digital currencies, the reality of doing so is much harder. A lot of wallets have no identification to them and rest on a server in a third party country. In the case of offline wallets in devices such as the Ledger Nano, theyre not connected to any network.so is it possible to regulate ?
The only way I know the government can regulate cryptocurrency is taxing it. Because in countries like China and Russia where cryptocurrency is banned, there are still a huge number of people who manages to use cryptocurrency. Meaning, they can't really have a full control over it.