Cryptocurrencies are not "just like cash". I cannot teleport 1 billion dollars in cash across state borders. I cannot store it my head while imprissoned. I cannot manage it without accomplices and theft risk.

The whole premise "exchanges as identity gatekeepers" is in contradiction with the promise of stable world wide cryptocurrencies that ar just as good as fiat. When that happens, nobody needs exchanges and money laundering becomes a fundamental feature of the financial system.