

I don’t use it, but modern blockchain isn’t how it used to be. It’s no longer proof-of-work, where you do a bunch of computation for nothing (with a few exceptions that still do this).
Basically, what’s required is just a receipt that says “X owes Y $Z”, and that needs to be accepted by nearly everyone. That’s essentially what blockchain is, and it’s also what banks and payment services do. You just need a system you can prove is secure and accurate. Centralization is one option for this, but I see no reason for it to be required.
Also, I disagree that this works because of government backing. That has to do with currency, and there’s no reason this needs that. We just need to track value exchanged. It doesn’t even need to be a real currency as long as we agree on the value and it’s stable. Government backed currency is an option for this, but not necessary.
In addition, any payment provider, centralized or otherwise, can use this currency. Nothing about a government backed currency makes it unsuitable to be used for a decentralized payment processor. The only thing that matters to that functioning is that it’s secure and reliable. It could use USD, Bitcoin, or cows for all the user cares, as long as it’s stable and they can get their value when they need it. Payment processors usually use whatever local currency is, but they aren’t actually using that money. That’s a display. It’s exchanged when needed, or there would be a ton of processing that isn’t required.
I didn’t say peer-to-peer or permissionless, but that would help. Anyway, yes, those are all things cryptocurrency is, but they are not cryptocurrency. They are a set of design requirements. Cryptocurrency is not necessary for those requirements. There are other ways to potentially meet those requirements, which could be better than cryptocurrency.
This isn’t to say cryptocurrency isn’t the right solution for this. It might be. I don’t think the limitations are as impossible as you do. Sure, costs for running the network would be higher, but what’s the cost for running Visa? I have no idea, but I’m sure it isn’t free. Cost is just something that has to happen. There could be a donation funded foundation that runs it, or it could be funded by a portion of each transaction, or something else. Costs are a hurdle, not a barrier.