If you mean to hold USD-denominated deposits in a local bank, the local government can easily confiscate or convert them. Numerous such examples. If you mean t

If you mean to hold USD-denominated deposits in a local bank, the local government can easily confiscate or convert them. Numerous such examples. If you mean to hold USD paper notes, that does happen a lot all over the world as you say; and not necessarily legally. Many advantages to digitization (and some disadvantages).