> you're describing a level of control that the US government can already exercise using the current banking system
You’re handwaving this away. Just because something is theoretically possible, it doesn’t mean that it’s as likely to happen as something else that is order of magnitudes less complex (imposing the level of fine-grained control discussed in this thread on the existing system, versus building it in from the beginning in a new one). Friction and inertia matters in the context of preventing government overreach
> Why would anyone use it?
Because the government mandates it. Because the only employers that will hire you pay out wages in it. You can imagine many scenarios where individuals don’t have much of a choice. Which could be a reason for someone to want this idea to not catch on, lest the current system gets replaced by something worse. Cheerleaders and enthusiasts may take the opposite view
> if you can exchange your dystopian stablecoins for USD
Yes, if. And for how long?
I’m not saying a motivated totalitarian regime controlling all levers of powers could necessarily be prevented from implementing their dystopia anyway, but we also don’t have to expedite technology that would make it significantly easier for them
This is a very strange scenario you're describing where: a) the global economy has moved onto the blockchain; b) the government has repealed all the major points of the legislation that we were originally talking about; c) the government has also exhibited complete dictatorial control over the logic of the major stablecoins, and banned all of the functionality that makes them actually useful; d) people decide not to use the blockchain's native token to settle transactions for some reason.
Remember, issuers want people to use stablecoins because they get to invest the funds in treasuries and hold onto the interest. If everything is blacklisted then no one will want to use them and the issuer won't make any money.