Western governments claim that they promote freedom in the world. They call themselves "democratic" and "liberal".
Well, Bitcoin could help them with that mission. Above all in today's times that authoritarianism is on the rise again.
But they seem to chose to not do so, but instead they try to eliminate Bitcoin's main freedom-providing feature: censorship resistance.
If there was any truth in the first sentence, then some of what you wrote below would make sense - but democracy and freedom are illusions that politicians very skillfully sell us every four or five years when they need votes in elections. Let's be realistic, something like BTC is just a nuisance in the existing centralized system, but as I wrote in another thread, still not so important and dangerous that any drastic measures should be taken against it.
Some countries have already gone a step further and banned cryptocurrencies as a means of payment, which only shows that in a legal sense, BTC as a currency can be effectively eliminated, while on the other hand, its speculative component can be maintained because it can be used to earn a lot of money without fear of jeopardizing the existing financial system.
~snip~
----
"Money laundering", "sanctions evasion" and "terrorist financing" are the excuses used by the anti-privacy governments. But available statistics about that issue show that cryptocurrencies are a very minor tool for money launderers, compared to the vast options provided by fiat money. Cryptocurrencies do not even provide what money launderers most want: "clean" money. Privacy services like mixers only are able to blur some tracks. But they can never provide "clean" money, only "cryptocurrencies of uncertain origin." They are maybe useful for small criminals, but not for the "big fishes".
You forgot to mention one more of the mortal sins that BTC is accused of, which is destroying the environment and causing climate change. A few years ago, some group of people from Europe even went to the US before their Congress (if I'm mistaken) to try to block BTC mining in the EU and the US, but they turned out to be quite stupid because they served a bunch of lies that nobody bought. Besides, the share of BTC miners in the EU then (and even today) is almost negligible, because electricity and everything else is quite expensive in that part of the world.
Thus: Western governments should re-think their stance about cryptocurrency privacy. If they want to fight authoritarian dictatorships, they should not treat their citizens like them. Instead, they should respect their freedom to transact privately.
(That also is valid for governments which are not part of the classic definition of the "West", but claim to promote similar democratic values, like Japan, India, South Korea, South Africa etc.)
Privacy in the sense that they don't know who sent
"money" to whom is something that
"they" will never agree to, even if it would be of great benefit in some cases. You have to wonder why most countries are afraid of this concept, especially those countries that have directly intervened to destroy the regimes of other countries and thus created a lot of enemies that they now have to be careful not to retaliate against.
In order to try to prevent this, they must have absolute control over everything, and what the most famous whistleblower revealed on the subject only shows that they know absolutely everything, and that they have been developing tools for tracking, identifying and deanonymizing Bitcoin almost from the very beginning.