US govt creates a list of companies eligible to receive social welfare money, and the smart contract money will only be exchanged with those companies. They can remove companies from the list at will, on a whim. They could also do this with all money if it’s something like FedCoin. They could do all kinds of interesting, dystopian things. I bet there’s a black mirror episode somewhere like this.
Sure, but we already have something similar to that in NY called SNAP. And honestly, it would probably be easier to keep doing that without getting the blockchain involved.
In any case, I don't think that's the sort of product that commercial banks are itching release when they launch their new stablecoins. I'm sure a lot of coins will have a deny list for AML/KYC reasons, but an allow list would be pretty cumbersome to maintain and probably turn off most users.