It doesn't need to be anonymous. Even if the state knows your public address, they can't confiscate your funds without you giving away your key. They can try to prevent people from accepting your funds but that's a lot harder to enforce

Why though? The transaction record is public in every possible way. You can trivially audit the origin of every single funds transfer in the history of Bitcoin. "Just use a tumbler" you say - except this is the government. They can just declare that they'll also be declaring that any tumbler accounts which receive blackballed currency are tainted and blackball everything which comes out of them too.

Cash is effectively a giant tumbler. All the privacy technologies in the cryptocurrency space are just trying to replicate the base privacy functionality of cash.

The reason why surveillance-state-centered interests cannot ban cash is that the public wouldn't stand for it. It's too ingrained in the culture and economy. The same needs to happen with private cryptocurrencies. We need MetaMask to adopt a confidential transaction standard the same way the major websites adopted HTTPS over a decade ago. We still have time as the financial mass-surveillance laws in place were designed for trusted third party financial intermediaries, and not peer-to-peer finance.

kraken.com? Just try a different exchange?

When I tried to sign up, I had to scan my driver's license, enter my SSN, take a picture of myself and attach a bank account. Doing all of that kind of goes against the anonymity aspect.

Oh I agree. BUT! Some good news, once you purchase bitcoin on it - then move it to XMR on it - you are off the grid.