From all stand point as Bitcoin keeps gaining more popularity and adoptions it won't be inaccurate to say the government are endlessly finding a way to do a complete regulation on Crypto currency specifically Bitcoin, Despite most times the word crypto currency might be used to address all crypto related digital asset but the main target remains Bitcoin due to it's decentralised and distributed network as well as been the major crypto asset.
Why it is obvious getting full control of Bitcoin functionality and distribution seems impossible due the fact it has no central point of control one might expect stricter rules governing the use of custodian and non-custodian wallet, declaration of all cold wallet addresses, Setting up committee to monitor transactions on the blockchain public ledger, introduction of wallet trackers and ownership on different OS and maybe lots of wild experimentation to make regulation a possibility.
Believe you me no matter how advanced bitcoin decentralisation might look or sound the government will never risk giving their citizens full control of their assets. The always want to be in charge and has long has they have this limitation of full custody stricter laws regarding Bitcoin usage might spring up. Technology is advancing
The problem is that many people lose their private key and lose their bitcoins. I gave some crypto to a friend of mine but he lost everything because he lost access to his private key. The government need to implement a recovery system based on identity. It already exists for gold and other assets. If you can prove that the bitcoins are yours (like a purchase receipt) then they can order the miners to release the funds. The mantra "not your keys not your bitcoins" is absurd. if you lose your private key it's still your bitcoins if you can prove that it belongs to you.