Assuming the majority of miners are KYCed and legislators coordinate requirements, I imagine something like.
Level 1: KYCed miners are required to not process transactions from list of banned addresses. 
Level 2: KYCed miners are also required to not build on top of block with transactions that break level 1 requirement. They can only build on such block if the last n blocks are all breaking this reqirement. This will strongly disinsentivise non-KYC miners from not obeying.
Level 3: change from banned list to allowed list. 

 Expanding on Level 1: Bitcoin is miners can censor individual transactions. It's not possible to do that on Monero. You're forced to attack the entire network if you want to prevent a single transaction. All things equal - this censorship would be *much harder* to do and sustain (and it gives miners plausible deniability) if Bitcoin was private.