It depends how the Blockchain is implemented. A common misconception about cryptocurrencies is that they are private. The crypto means cryptographically secure, not cryptographically private.
A Blockchain based digital currency could also hold the entire history of all transactions made by people and a privileged party could identify the holder of each wallet. In fact we can kinda do this with BTC, but we can't identify who holds the wallet until they cash in or out through an institution.
This technology is the wet dream of a fascist regime. There are no secret transactions. Cash is non existent. Cash is only used by criminals. If you aren't using a traceable currency then you have something to hide. All transactions are stored. This should also be an issue for many because laws change and aren't consistent. Buy weed legally today, it gets criminalized, get punished. Buy a drink at the local gay bar, travel to a LGBTQ unfriendly country, get interrogated.
It's not about what is happening so much about what could happen. How can the technology be abused. Maybe it's fine with our government but is it everywhere? It's about not giving power to saints that devil's my inherit.
But this is why we have privacy coins. Some coins don't even maintain the leger but a hash of it (hashes all the way down). You can't peek at the leger but you can verify it is consistent (added benefit of keeping a static leger size too). You can have zero knowledge transactions. You can have differential privacy. All these technologies are not a necessary condition of a blockchain but are privacy enhancing. These are not a fascists wet dream but rather a major roadblock for them. Those fighting against them are allowed to operate beyond their knowledge.
So the bigger again is what is the cost benefit analysis? Are terrorists and tax evaders such a problem that it is worth the technology that a future fascist could inherit? Or are they not?