This might be a learning moment. Without government, aka anarchy, society would quickly devolve into bitter, cruel chaos.
This is not a technical challenge I’m making. This is a political demand.
You would also still have to prove it’s more efficient and has a smaller carbon and energy footprint than traditional currency.
I agree with you that cryptocurrency is not currently particularly intrinsically useful, but I don't believe that "let everyone use it in a decentralized tamper-proof manner" fundamentally requires "and simultaneously restrict it from the following uses, which a subset of the global population deems undesirable".
(In that regard, it's similar to "regular" crypto. I don't mind that people I don't particularly like are also able to use crypto to secure their communications. It's essential to my use case that they not be able to intercept my comms, and I accept in return that I can't intercept their comms either.)