That was the threat of FATF. It's all out war on bitcoin first of all. Centralized exchanges must be abandoned. Bitcoin's entire point is to be a numbered anonymous swiss bank account. Not a named controlled privilege for hyper regulated hyper taxed first world nations. Bitcoin was meant to assume people needed protection from the government. It will not work with these centralized exchanges, and FATF has declared war on bitcoin with it's travel rule. The travel rule has to be resisted at all costs. Wallstreet, and venture capital, now silicon valley, have gotten too much power through investing into crypto, pulling it away from its original purpose. They want to sanitize it and sell it back to you as a different product while controlling you politically. Do you really think that if this KYC stuff is implemented in a place like Venezuela that people could use bitcoin, of course not it is a de facto ban on the unprivileged. There's no way to protect ourselves other than ultra mass civil disobedience, and that is not possible without appropriate decentralized liquidity on DEX.
You're right in the regard that if a large scale, global restriction on bitcoin ever does occur, it'll have the equivalent effect of driving bitcoin out of fulfilling one of its primary functions, which is to help the unbanked, who often cannot pass KYC with sufficient standards to begin with.
I don't think that this stance of the FATF is anything new, however, and I certainly don't see how they are capable of enforcing such a blanket ban that they seem to be pushing globally, if it ever does get implemented.
Decentralized exchanges could be an alternative, but even technology today doesn't solve the primary problem of how to conduct fiat to crypto (or vice versa) transactions while staying decentralized, although that is already fulfilled by p2p exchanges (which seem to be tightening their KYC stance as well, probably due to these new looming regulations).
