So if fiat does NOT get converted, and the fiat withdrawal is very limited.. Our fiat is stuck there? I'm guessing people will be reluctant to sell their BTC / similar for fiat if it will be hard getting it off the site.
Why bother taking fiat off site, just buy btc send to your btc wallet and then sell via a local fully legalized exchange...
Unless u try to avoid the taxman...
But that's my point.. If there is a site where you can sell your BTC for fiat, but not get the fiat out of the site.. would you sell? No. There would be nobody selling coins for fiat, so that's not an option.
That's the rub, here. There may be some limited fiat withdrawal options, but my guess is that there will be a premium for cryptocurrency vs. the fiat markets, since they will not be able to easily move funds.
As for the "why bother taking fiat off site" sentiment......that's true for many or even most people, but there must be an assumption that
the money is worth something. If no one can move fiat money, then it's just another token.