All currency should be treated as cautionary. Crypto currency can be useful in a way that most fiat currencies are far worse off with. The numbers in your bank account are pseudo-money pretending it's legitimate. Crypto is simply pseudo-money attempting to be legitimate. Neither are money.

A regular payment processor has to do something stupid and short-sighted to give China that kind of control over their transactions

You realize that pretty much all of Big Tech is in league with China, and so are all the major investment banks, and so are all the payment processors. Literally, China's US debt holding is a huge amount of control that China just has over the entirety of the US economy.

China's control over some crypto is likely far less than it's influence on the petro-dollar system.