Great point, this is definitely a scenario that keeps me up at night.

The idea of stablecoins effectively turning into de-facto CBDCs through regulatory capture is chillingly plausible. You're right, why build a new digital currency from scratch when you can just co-opt what already has massive adoption? Forcing KYC/AML on issuers and then exerting control over how those 'regulated' stablecoins are used would achieve pretty much the same outcome as a direct CBDC, but perhaps with less public resistance initially.

The implications for financial freedom and privacy are huge. If every transaction can be monitored, frozen, or even programmed by a central authority, it undermines the very ethos of crypto. It shifts the power dynamic significantly.

It makes me wonder if genuinely decentralized, algorithmic stablecoins (even with their past challenges) become even more critical in such a future. They might be the last bastions of truly uncensorable digital money.

Do you think there's any way for regulated stablecoins to exist without eventually becoming tools for central control, or is it an inherent trade-off?