They would essentially drive it underground so that if you bought or sold or transacted in crypto you would have to do it through the equivalent of dark alleys or obscure smoke filled venues.
Something like the contrast between trying to procure cocaine vs aspirin
Woooo! spooky VPNs....
It will be easier than you think: You could just send crypto to a friend and they wire me the equivalent in $ with india being non-the-wiser.
But how do you know the price? Much less price discovery.
Would it be easy to transact OTC like that?
If I were a state I would make bank to track those wire transfers. A sufficient amount of them without reason would make authorities ask questions... Like are you running some sort of business or something? Why aren't you paying us taxes that you potentially owe?