The concept of fungibility is that the value is not dependent on the legacy of the note. It’s a really important metric for a currency, one that most cryptos are lacking. Monero has it, few others do. Tax authorities would love to eradicate fungible cash for obvious reasons.
Discussion
True. Monero is never going to make it because it’s basically designed to facilitate crime and money laundering. It’ll be effectively blacklisted sort of like tornado cash.
If the authorities control currency digitally and implement social credit, some people will need Monero to feed their families. An entire marketplace will become necessary for non-conforming populations.
So if there are social outcasts living on monero and they trade it to people living “legitimately” for resources, what would they then do with the monero?
I suspect an economic dichotomy will develop with a group of people parallel to both economies. Much like a Venn diagram with a white and black circle overlapping to form a grey shape of varying size. Somewhat similar to what we have with cash and cards today.
Crime and money laundering is the excuse, but we know it's really about control. Otherwise, USD would be at the top of that blacklist.
I see Monero, at the very least, a haven of last resort for those that need it. Not necessarily adopted by broader society.
That being said, black and grey markets are something like a quarter of global GDP, so plenty of room to grow and thrive there...