I think there is merit to considering the deal.

First of all, you're not deciding for yourself, but for your entire country. Some may be unphased by this fact but it's worth considering that not everyone is a rebel like you.

Second, like I tried to sneakily point out in the nuance section, most of the trade-offs are already a thing in most of the developed world, so it's not like we're significantly sliding towards totalitarianism.

Third, this is not necessarily a "capture" of Bitcoin. The State does not interfere with the network itself, just makes "best effort" to ensure tax compliance and control of criminal funding (granted, it's an ineffective attempt, but still probably the best a State can do).

Fourth, there will be inevitable grey zone anyway. The question is, would you go out of your way to seek out merchants willing to trade with you off the books? (Read: commit crime.)

Now the upside is, we're planting a huge "Trojan Horse of Freedom" (as Bitcoin has been characterized). Now, I only mentioned that this is the initial law that is passed by the will of the djinni, but it is worth considering how the situation evolves in years to come.

I guess I shouldn't be surprised that most people here would rebel against this idea, but I actually think we should expect similar controls if a western democracy ever adopts Bitcoin as legal tender (for whatever reason).