They can't block crypto wallets. It is not possible, even for God.
What they can do, if you use an intermediary which acts as a trust holder, is have THEM suspend the account.
Alternatively, they can track who has done business with companies who sell cryptos and then have those accounts frozen.
This will end up propelling Monero over Bitcoin, in my opinion. Because the ledger in bitcoin is publicly displayed, it is possible to track. It is not truly fungible. They will begin getting violent against crypto users and businesses. Heinously so. Nothing is more foundational to The Crown than the face of legal currency.
Strictly speaking, Monero is impossible to trace from the ledger, alone.
In real terms, the points of weakness are cyber security - if your computer is bugged, doesn't take super sleuthing to figure out what you're doing. If you are using your real name and other data in a way that can identify you with a specific transaction.
All mail order businesses will have a footprint of parcel addresses and recipients. Any physical location can be monitored.
They are going to do anything and everything they can to make people fear them more than they fear God. The State wants to be God.
But it is a facade. They can barely track bitcoin, and it is publicly posted. More sophisticated blockchains are not possible for them to operate against directly. They must go back to gumshoe investigation, and that is for the servants to do, not the rightful betters of society.