Counter-proposal. Each country or trading bloc issues its own currency. Then, they use it internally, for domestic transactions. If they want to trade externally with other countries, they use a ledger system to record debts payable to each other domestically at an exchange rate determined by a multi-trillion dollar global exchange system, of supply and demand, based on how far 1 unit of currency will get you in one country vs another.
We can call it: "exactly what we do right now"
The only reason the US is able to sanction other countries is the scale of their economy. They influenced Europe to cut trading relationships with Iran, not through the US dollar, but through exerting political influence. The Europeans would rather trade with America than Iran, and America said they got to pick only one, so they complied.
None of that changes under Bitcoin or any other currency, crypto or otherwise, in no small part because reporting requirements don't go away. Laws don't go away. Political influence doesn't go away. International relations don't go away.
Do you really think that with cryptocurrency America would be unable to materially sanction Iran? Are you sure? The US Army is a pretty good army.
Ok, but how does that help them? Unless they're buying digital goods, all of their spending will be concentrated domestically. Without international trade (as nobody will do business with them for the aforementioned reasons) -- it's not like DHL is going to airdrop in their Amazon Prime purchases. Their welfare does not improve through "irreversibility" (in quotes, because a hose is all it takes to reverse any crypto transaction). In general, irreversibility hurts their welfare through breakage. Their transactions aren't guaranteed if the internet is censored, which in Iran, it is.
The government already has total control over the domestic economy, and can coerce you through violence. What have you gained other than a dramatically less energy efficient economy?
