Arguably this is already a step too far. It's likely that we'll start to see CASPs (as they called them in the regulations) closing the gates to self hosted wallets and their users. This will push those users into the grey/black market.

Once people start feeling the heat of what's queued on the pipeline (carbon credits linked CBDCs) there'll be a move for acquiring KYC-free coins to bypass the evergrowing economic control. That will lead to a two BTC system, similar to what happened in Argentina with the USD.

That's my hope anyway. I'd love to see a widespread parallel economy. All those economic transactions only growing distrust on the political system, all those uncollected taxes defunding the govs, them forced to print an ever increasing amount of money devaluing the currency against the street exchange rate while keeping an artificial "official" price, people seeing how street and official price keep depegging being more and more prone to opt out... It's the perfect feedback loop to end with their clownery while they try to retain power.