This might all be cope, but I agree. NKYC is a luxury of peace of mind. Not compatible with mass adoption.

I can see several scenarios playing out. One of them is a bitcoin ban that sends most small investors panic selling.

The liklihood of the government expending resources to hunt down people who self custody BTC seems low and would backfire.

Most USD is off shore and there's no way to stop the fiat whales from escaping into BTC. However it might be easy to stop 99% of the country from buying legally.

In the end I can't think of a single example of something a government has successfully banned. We have already won.