Throw a non-negotiable 1-year imprisonment into whatever penalty they enact for using bitcoin. Then imprison the thousand most prolific users (business that accept it, people who publicly exchange it, etc.), and continue doing sweeps of anyone who admits to using bitcoin for the next few years. Suddenly, the only people who are willing to use bitcoin are those who are already using it for illegal things.
Keep in mind that they don't need to kill the entire system, they just need to make it too risky for the average person to even consider using. That is sufficient to make it fail.
Keep in mind that they don't need to kill the entire system, they just need to make it too risky for the average person to even consider using. That is sufficient to make it fail.