Not intending to defend either system but private financial institutions basically end up deputized as enforcement arms of anti money laundering and sanctions in the US and probably other countries where the payments systems are privatized. That's a why every bank has a big compliance department - the laws say a lot about who and what they can serve and they have to be on top of it.

Which yes means sometimes legit transactions that match rules meant to catch money laundering and other shady business get blocked or flagged. Sometimes out of avoidance of legal risk, rather than actual certainly anything illegal is happening.

I don't know if the centralized government implementation would be any better in that regard, but at least you could complain to the government instead of having a bank hide behind a law they didn't write but have to enforce.