Governments can issue regulations as they please. No doubt about it.
The promise of Bitcoin was to leave governments unable to enforce any kind of regulations using technology and decentralization.
The problem with that promise is that it is enormously expensive for consumers to run Bitcoin nodes. Therefore everyone uses third parties, there's not that many of them and there's absolutely no way for them to stay resistent to regulations.
So as I see it, there was a time when governments couldn't enforce their regulations to decentralized currency. Now they can.
What do you think? Is the Bitcoin promise broken?
That's somewhat true! Bitcoin can't be controlled by the regulatory authorities! But they can certainly provide a framework to use cryptos within the mainstream economy and to mitigate the risk of illegal use of it. I think it is very important to curb the illegal usage of cryptos. The deepweb is one of the examples of illegal crypto usage and it is rising alarmingly. It must be stopped before it gets out of the hand!
So even if the bitcoin promise is broken, it's better to have some sort of legal framework around cryptos. It will fuel adoption as well as make things smoother for crypto users for longer term!