Sure they can criminalize bitcoin possession or use their police force and state apparatus to serveil and track all bitcoin usage. But that is way more effort than simply turning on the money printer.
It's much simpler than that, they simply make selling bitcoin a capital gain event (which it is) and tax it. They could even make a separate special rate for cryptocurrency pretty easily.
Now maybe you think this is easy to avoid, in which case I would ask why you aren't already committing tax fraud.
The reason tax evasion with regular currency is so difficult is because pretty much all banks/financial institutions report your income to the state. But with crypto, especially anonymized ones like monero, the decentralized nature makes it almost impossible to track income and who it belongs to.
It is almost trivial for a 3-letter agency to track bitcoin flow. Every transaction is entirely public with only pseudonyms to obfuscate identity, and with the current KYC laws good luck not getting doxxed while buying BTC.
We need to move this discourse away from "crypto" and towards Monero specifically if we want any progress on adoption
Isn't a wallet just a private-public key pair? One could easily generate those on a whim and start transacting using them. I assume the KYC laws apply to exchanges but what about individuals with bitcoin directly trading with each other? No way to track that
Yes - I buy my bitcoin using a decentralised exchange over Tor. All the authorities can see is that I send a random person some money to their bank account. They have no idea what it's for, and would have to individually track down and successfully interrogate each different person I send money to, to discover how much bitcoin I had bought and even then they can't prove I own it.
