[cherryteastain]

The whole point of crypto is that, assuming you stay fully on chain, it cannot be regulated the way banks are. When you have the right keys and a connection to a node, nothing can stop you from sending BTC to another wallet. Regulation of crypto is possible only at the blockchain-tradfi interface (e.g. US Govt could tell Coinbase to not interact with a particular wallet). However, if crypto gains the sort of traction where you can buy most items with purely on-chain transfer, regulation becomes close to impossible as we see with cash.

[aketchum]

The government in question can easily pass a law making it illegal for traditional financial institutions to interact with crypto. In this scenario, most users will simply stop using it to follow the law. For the die hards fans they will still reduce the use of the currency. They need to pay for taxes in the national currency and thus need income in the national currency. You still owe taxes on illegal income. Businesses need to pay payroll, vendors, and all taxes in the national currency. All of this means that individuals and businesses need national currency backed transactions to get the national currency to pay the taxes.

I agree that if you made "using btc" illegal then you and I could still send each other BTC. But I believe that you would rapidly see the use of crypto die out if governments cut it off from trad-fi, which they could do trivially easily.

[cherryteastain]

Posession of gold was banned in several leadimg economies such as US and UK in the 20th century [1]. Didnt really stop people from using gold as a store of value.

[1] https://en.m.wikipedia.org/wiki/Executive_Order_6102