Merchants and traders would have to adhere to the new rules,
Well, that is just it. People who use BTC do not have to adhere to the rules. The money is not the property of the politicians, it belongs to those who
use it.
If you live in a communist country it could become a problem, though. I can imagine Castro making up some crazy rule and trying to kill those who break it. Liberty is a powerful thing and the wrong people do not like it.