>Harder for banks and the Federal Reserve to block payments

That will vary by country, and the Federal Reserve is also US-specific. There are gamers in more countries than just the US :).

But yes, I certainly agree that the duopoly of Visa/MC needs to go.

How does this work with UPI and Pix?

Steam has recently added UPI. Since it is completely interoperable, one company/bank can't block it. Govt. may block some account, but than they can do so much more.

I'm not sure. I live in Canada, we have a system called Interac, but it is not an accepted payment method on Steam the last I checked.

Do they have any history of gating or censoring payments?

I am not aware of any situations, no.

But this is getting a bit into the weeds, I think. The point is that as it stands right now, today, Visa/MC is what Steam runs on. It would take a long time (months, if not years) for Steam to roll out support for every country that has their own system (Interac, Pix, etc.). We also can't forget that not every country has systems like that.

The most reasonable course of action today is to hope that Visa/MC can be forced into providing payment processing for all legal goods and services. Meanwhile, Steam will hopefully roll out other payment methods, other countries will adopt non-Visa/MC systems, and the duopoly can slowly be broken.

Given how Canada interprets a few things, and the actions the govt took to protesters, I'd be more surprised if they didn't.

You're welcome to be surprised then. Only cases I've heard of Interac blocking accounts is KYC/AML and actual fraud. E-transfer (the Interac's name for bank-to-bank online transfers between different people) is about as close to handing somebody cash as you can get, albeit with amount limits varying between $2k and $20k.