I'm not sure these are irreconcilable. I think the idea is that everyone on a crypto network is untrusted in an idealized scenario - no elevated privileges. I

I'm not sure these are irreconcilable. I think the idea is that everyone on a crypto network is untrusted in an idealized scenario - no elevated privileges. Institutions/governments have elevated privileges in their financial systems. For example, it's illegal for you to personally print currency while someone in an institution somewhere has currency printing privileges. Relative to you, they have elevated privileges. Saying you don't trust government/institutions with elevated privileges in a system you operate in is different than saying you don't trust them to operate in any system with you. If your goal is to reduce the scope of their elevated privileges, than legitimization of a system by institutions/governments could be viewed as a net-positive: they're coming into your ecosystem to operate by rules you've adopted, not the other way around. The argument gets fuzzy as you explore the edges. Some folks in some crypto networks do have elevated privileges through real world social contracts (i.e. core devs forking a chain) - and governments do have elevated privileges under threat of violence.