They don't want privacy.

Good ole’ Bank Secrecy Act, aka the Eye of Sauron

Because freezing funds for a single address is not possible?

there is no great way to freeze funds for individuals. If they did ecash they might get a cruise missile through their offices

Because it’s a bearer asset and sure they don’t wanna give you that

Would be so much cheaper and I’d actually use it…

Unfortunately I don’t think their regulators would appreciate the lack of censorship

To prevent a cruise missile attack.

They should be able to issue fiat backed cashu(backed by nothing🤣) once tether is on lightning.

Too private. Governments want to at least make impression they control things, they would not agree to ecash. Buts once Tether is on LN, we might expect USDT mints start popping out.