This should bring attention to the importance of Defi protocols like Uniswap, onchain mixing similar to Tornado Cash, usage of anonymous coins and the development ZK rollups similar to ZKsync.
Except all this DeFi stuff can't do fiat on-/off-ramps. You can only get so far with that. Sure, swap one token for another, or even cross-chain atomic swaps. But I believe most of the services that deanonymize users are centralized exchanges, which are seen as the only way to acquire or sell cryptocurrency by most users.
Agreed, however, what is the cryptospace if it is not being developed to avoid converting to fiat. I reckon stablecoins might have very good growth in the cryptospace as we have been witnessing since 2017. The liquidity and volume of much of the market is in stablecoins and many exchanges have begun to accept only stablecoins as a replacement for fiat for purposes of compliance. Shadow banking in China is speculated to be running on USDT as their main currency..
Also, by using stablecoins it brings to the community a better solution for fiat. It is permisionless, borderless and can be cheap to use.