Of course it does because everything that even remotely touches the non-shadow economy, starting a business, investing in publicly traded firms, interacting with everything that isn't crypto, paying taxes or anything that touches the rest of the world is subject to governance. You can invent a hundred new crypto technologies, if you want to actually do something useful with crypto other than betting on crypto exchanges or buying heroin online you'll need to have some sort of legal recognition.

Ring signatures are cool tech, but it's important to point out ring signature plausible deniability promises only work _in the absence of outside (off chain) information_.

When coupled with outside information (Cooperation with exchanges and other large holders, timing attacks of IP addresses, etc). The plausible deniability you get from ring signatures can be much lower in practice

Edit: Here's a really good video with some of the core monero contributors on EAE attacks https://www.youtube.com/watch?v=iABIcsDJKyM

By the same logic then no government enforcement would matter if we're talking about coins and bills, because they too are untraceable.