Why prosecute when you can tax? Before the Civil War, thousands of businesses, local governments, and private banks issued paper currency in the US. This enab

Why prosecute when you can tax? Before the Civil War, thousands of businesses, local governments, and private banks issued paper currency in the US. This enabled all sorts of scams (banks that didn't exist or wouldn't pay full value, etc.) The federal government was barely a player in the space, with sporadic and limited issues until 1861. With the National Banking Act in the 1860s, the federal government slapped a 10% tax on privately issued notes. The industry collapsed virtually overnight, federal government notes take over the ecosystem, and we start to see a currency ecosystem which resembles the dollar we know today. If crypto becomes a serious logistical problem for state actors, we'll see the equivalent trick. Spinning up a state-backed digital coin is a relatively modest technical task, because it doesn't have to solve the decentralized/trustless problem. Just take existing banking infrastructure and scale it horizontally. Any s such state-backed currency just has to be cheaper than (your favourite crypto) + (penalty taxes) to immediately win the mainstream market. This model also puts a significant direct motive into deanonymizing privatecoins. The revenuers may not care you're using XMR to buy fentanyl, but once they can demand a 10% cut of it, they care about who owns them.