> Are there scenarios where a bank (or other financial institution) can steal/withhold funds from you, or where they can censor your ability to transact with your own money? What is the recourse you have in those situations. What if the L1 itself uses its “right” to take your money through civil forfeiture or eminent domain?

Eminent domain is about land use. Civil forfeiture and eminent domain are well described in the laws of all developed countries. And they exist for very good reasons, we don't want to get rid of this at all.

The aim of the article is a critique of the potential for cryptocurrencies to be a true exchange medium equivalent to currencies as we have today. That is the illusion that feeds speculation and big dreams. If you are proposing that the use case for cryptos is individuals that have a reason to fear their own government, that leaves us criminals, political dissidents and wealthy oligarchs in third world countries. And it's still unclear whether they would be better served by storing their wealth in such a volatile and fraud-prone medium, versus actually digging a hole in the backyard as you describe. Or, you know, trusting another government/banking system like Switzerland like they all do.