by breaking the link back to the MC, you've broken Bitcoin's Sound Money principles. these scBTC you're talking about will exist on inherently less secure SC entities whose ledger integrity will not be guaranteed as they will not be mined by independent, distributed, third party mining auditors. these SC entities will allow conversion of scBTC to all manner of speculative assets like shares, bonds, contracts, derivatives of all types which will be traded on exchanges. their value will fluctuate wildly and there will be winners and losers. mostly losers, i would guess. but those assets will not be the Bitcoin Money as we know it. they will be transformed.
this transformation must be taken all the way back to its root cause; the SPV proof.
mostly all of your arguments are shown to be irrelevant if we consider that sidechains can be implemented today without the SPV proof.
bitcoins being converted to represent assets is not a new proposition and something that will exist sidechain or not.
that would be true.
i don't have any problem with SC's being implemented thru federated servers as they don't involve changing source code. but as soon as you do change source, as with SPVproofs, all sorts of unpredictable things start happening as i've outlined.
currently, when BTC gets "exchanged" for assets, those BTC just change hands and still exist on the MC and remain secure and can
continue to circulate. SC's introduce another dynamic completely. BTC's get siphoned off MC to speculative SC's created by Blockstream for insecure, potentially dishonest entities. it's conceivable these entities will be gvts as Austin has said. in this case, BTC's essentially get converted into whatever asset the SC is offering. this destroys Bitoin's Sound Money principles. the key to this dynamic is the SPV proof.