"This will only cause people to flee to the virtual currency and stay there, over time" Only if they can actually do stuff with that virtual currency in the re

"This will only cause people to flee to the virtual currency and stay there, over time" Only if they can actually do stuff with that virtual currency in the real world, like pay rent and buy food. Otherwise, not so much. "Given 2 options, one with a lot of friction and one without, no matter the "marketshare" of the first, the latter one will eventually win." This isn't always true. "The only way fiat can prevent this is to stop punishing good actors with AML/KYC compliance." As has been posted, it's not that hard to comply. And if they want to act like a real currency, then they should be following the same regulations as real currency.