It seems inevitable to me that if cryptocurrencies don’t fail or eat themselves with scams and bubbles, they will be banned by most nations. Outlawing unhosted wallets is basically a ban, since hosted wallets are essentially the same thing as a regular bank account. At that point there is little reason to bother with the cryptocurrency P2P layer.

There’s two reasons countries would do this. One is obvious: control and law enforcement. The other is to prevent the emergence of any threat to sovereign fiat currencies which are effectively weapons of economic warfare.

“The fed is a weapon,” as one finance person once said, and he called it a kind of economic Death Star. Countries with major sovereign currencies used internationally can in effect levy an imperial tax on users of the currency by exporting inflation. Seeking to “end the fed” is basically akin to trespassing on a military base and sabotaging ordinance. The US isn’t the only country they does this, but it’s probably the largest. Countries like China might want to displace the dollar, but they don’t want Bitcoin. They want to displace the dollar for the Yuan so they can pull the same trick.