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It has little or nothing to do with regulating Bitcoin, its about regulating businesses within a certain jurisdiction that deal with both fiat currency and bitcoin, where's the problem in that? Fiat's involved so their government has a right to make rules, that's practically the definition of fiat.
EDIT:
is this what regulation will look like in all states/federally? looks kind of burdensome for businesses....
Looks like folks aren't doing much reading, this keeps getting mentioned and there's an article specifically exempting anyone that sends or receives bitcoin in exchange for goods or services from regulation, ie. businesses. (200.3 c 2).
You are wrong and it is very clear. Here is one example.