I would suggest caution, as it's hard tonpredict the future based on current levels of attempted (enforceable or not) regulation. Most people who happily KYC their Bitcoin do not kjow how UTXOs actually work and what that actually means even for their "cold storage" Bitcoin.

Example, the recent bill in the US that aims to tax Bitcoin P2P transactions over a specific amount, while I believe to be non-enforceable, would come into play here.

People who joined their Bitcoin UTXOs to their government-based ID would be essentially gamed out of using Bitcoin as the true P2P system it is, at least the KYC'd UTXOs.

I've always been a proponent of non-KYC, not for the current usage, but future-based changes. We don't know yet how far governments are willing to go.

As an example, it seems to me like most people who are okay with KYC are ultimately just waiting to cash out, at which point they pay their taxes and that's that. The Bitcoin protocol, and its very ethos, stand for and offer something else entirely in its potential for daily usage as a store of value and currency.

Another example, anyone not expecting Bitcoin to satisfy the requirements as a microTX currency is again basing their opinion solely on the present, not understanding how protocol develop upwards in a stack, again, regardless if Lightning succeeds or not.

In summary, I think there're too many uncertainties around KYC and what that means for a government's power over a stack of sats. Someone is always able to KYC a stack, but going in reverse is not as easy/straight-forward. Bitcoin is a low-time-preference game, not just in gains but in its very development.

As such, it makes sense to keep the usage of Bitcoin as pure as possible - It is a SEPERATE system to fiat. Attempting to merge the two might well turn into a trap, wittingly or not. Apologies for the long read.