The US could simply ban US banks and financial institutions from doing business with crypto, and from doing business with any foreign entity that does business with crypto. That would make it mostly unusable except as just another aspect of the criminal underworld shadow banking systems. That's based on the current state of crypto though. If it becomes a common medium of exchange with many people having some or all if their transactions denominated in crypto, that option kind of goes off the table.

Essentially an embargo against crypto? Similarly to how the US treats a company that deals with Iran?

That's precisely what I'm thinking. Of course Iran, as a country with an economy of its own, can still function internally, and there's a black market, but there are also risks to that. Crypto certainly couldn't hit mainstream transactional usage under those conditions, and there would be safer places to keep your money legally & avoid the risk of having your assets frozen.

The window is closing rapidly on this option though. The more it becomes just another financial asset class with trillions in market cap, the harder that option becomes. However, if a country like the US ever decides it's a real threat to it's sovereign monetary policy, it could take that option anyway and simply bail out those impacted financially.

I think the most likely scenario is simply that it becomes regulated like any other part of the financial system. Heck thinks like CTR's SAR requirements. It will be difficult to ever get Bitcoin or others to their dream of decentralized currency unbound by governments when governments can make regulations controlling it's usage. The average business owner isn't going to risk their business and jail time trying to work outside those regulations.

Regulation will never work, never. It's not like trading human organs is outlawed or anything.

If crypto only ever rises to the level of the human organ trade, it will have failed to deliver on pretty much all of its promises.

If you think the human organ trade doesn't exist, some Uighurs would like a word with you. https://en.wikipedia.org/wiki/Organ_trade#Illegal_organ_trad...

"Despite ordinances against organ sales, this practice persists, with studies estimating that anywhere from 5% to 42% of transplanted organs are illicitly purchased."

If you think outlawing that market doesn't drastically reduce its scale, your reality is so different than mine that there's nothing more to be said.