The truth is without the centralized structures, cryptocurrencies are almost useless. So should the government want to fully regulate the space, you need to first ask what sort of regulation it's going to be. There's regulations, and there is outright ban. Regulations seek to put the operations of crypto entities within the confines of the law and is mostly intended to protect citizens/residents of such countries e.g. the USA. Bans are extreme cases of regulations often accompanied by "cease and desist" orders and other centralize institutions will be barred from facilitating transactions most especially the banks.