In the truest sense BitCoin is commodity, not a currency. You can create, or buy, title to ownership of a piece of information that others have agreed to both recognize your ownership rights, and value it as well. It also, unlike every other currency today, is the ultimate Hard Currency because there is a hard upper limit on its creation. You can mine more gold for your gold backed currency, but the total number of BitCoins under the current rules (a most important distinction) has a hard cap.
It's also the ultimate fiat currency because although it took some effort -- or lucky guesses -- to create, it is not legal tender anywhere. It only has value between 2 people willing to agree on that value. Rather the Esperanto of money. But to try and turn it into a currency so that governments can regulate it under existing laws is absolute Fraud on their citizens.
Of course, when has that ever stopped politicians from "creating" new tax sources, which is the ultimate end of this exercise in case you hadn't realized that yet.
Everyone in government supporting this regulation fantasy should be voted out of office immediately -- although we all know that's never going to happen.