I've been thinking about the idea of USG moving to BitDollars for a while here. I think Sam touches on some of the smaller potential benefits here, particularly the potential to have built in tax system. But is completely missing some of the bigger benefits, instead tying most of it back to UBI. Which I don't think gets particularly easier or more likely with BitDollars, and also IMO provides no benefit to society. Here's what I think are some of the truly revolutionary things about BitDollars:
1. It may allow us to get rid of banks. Now this is a pie in the sky vision here, banks do a lot of things. But the most basic thing they do for individuals, storing your money for you so you can spend it later in a more convenient way, is completely obviated by Bit$s. Some of what banks do isn't going to be obviated by Bit$s, I still think there will be a market for loaning money, but it will probably looks quite different.
2. It may allow USG to tax the entire world. US dollars are already among, if not the, de facto international currency. Although this position may be waning. But if Bit$s were the first ever government backed cryptocurrency that people trusted they could wind up being the world's currency. Right now, when people use dollars outside the US, there's no way for USG to levy taxes on them. That changes if you control the entire stack including the mechanism of exchange, you could bake taxes right into the currency. It would be a new form of colonization, cryptocolonization. Now, I suspect the HN crowd pales at the idea of tech being used as a method of colonization, but consider: if this is a risk, then if USG doesn't do it someone else will. Would you rather be paying Russia taxes on your BitRubles?
The biggest political question with respect to BitDollars is whether or not USG will maintain their right of seigniorage? It seems unlikely that such a right would be given up willingly, but on the other hand it's very antithetical to what cryptocurrencies are, at least today.