The deciding factor will be what actual law makers do to it. ICO bros thought they were magically exempt from that boring old law stuff because 'it's on the internet' and then the last few years have been spent slowly hunting them down and mopping them up.
It seems regulators are already catching up. According to this thread from Brian Armstrong, there are rumors of new Fincen regulations in the works that could force KYC on Defi counterparties.
https://twitter.com/brian_armstrong/status/1331744884856741888This could also make WBTC or stablecoins much harder to use, and could affect regular medium of exchange use cases. I'm not looking forward to seeing what comes out of this.
I would expect anyone attempting to be in the finance space to be required to abide by current finance regulations, including KYC and AML. If this renders stuff like defi untenable, that's not a big loss in my book. From this twitter thread, points like this:
Finally, many recipients (in the U.S. or abroad) who value their financial privacy, may simply not want to upload more identifying documents to various companies, which could be hacked or stolen.
don't really sway me. Yeah, a lot of people would value privacy in all manner of their financial lives, but you're not allowed to open a bank account anonymously
for some pretty good reasons. A decentralized system just isn't compatible with our society because there are too many bad people doing too many bad things, and this would be far worse without accountability.