[aaronax]

A government could easily mandate block lists. All legitimate businesses dealing with cryptocurrencies would be required to not consider "blocked" coins as valid. I can even realistically envision broad support for such a change, when some "character" who is sufficiently evil becomes known (via non-stop media targeting I suspect) to be empowered by a certain cryptocurrency.

I suppose there are some blockchains where it is not possible to follow balances between transactions. I'm not sure what would happen with those.

[bingbong70]

Coinjoins and whirpooling bitcoin is becoming cheaper, easier, and more widely adopted...chain hopping is also becoming easier thanks to decentralized exchanges and atomic swaps. If the government wants to censor transactions they have to expend many times more energy than any person with a free wallet and 5-10 minutes. Enforcement becomes cost prohibitive as the network grows and more people use these tools.