[grey-area]

> The blockchain and smart contracts serve this purpose.

They do not, and the bitcoin blockchain in particular eschews identity verification in favour of pseudo-anonymity and puts people in charge of their own anonymous keys - perfect for criminals (anonymous enough to evade police) and states monitoring citizens (not anonymous enough to evade states, lasts forever for retrospective enforcement), but terrible for normal citizens who just want to be sure who they are transacting with and be able to get compensation if they are defrauded.

Blockchains and smart contracts are no substitute for real-world contracts enforced by courts and regulators, and the cryptocurrency attempt to supplant state currencies and their legal supports actively undermines any attempt to get regulators to seriously go after fraud. So instead regulators have classed them as assets (so they can tax every transaction in theory) and washed their hands of them.