IDEA: add the functionality to pay interest/rewards into a separate wallet

This is sorely needed in the DiFi space, not only in Terra/Anchor.

$1000 USD fiat (say, with KYC) > $1000 USDC (on public block chain) > $1000 UST (public block chain). … [5 years at 20% paid in to another wallet] … > $1000 UST (public block chain) > $1000 USDC (on public block chain) > back out to $1000 USD fiat.

No gain, no loss. Nothing to see here.

This sounds like a request for tax evasion.

I’m actually fairly happy (as a US citizen who pays their taxes) with the current UST > aUST > UST method, as it means that investments in Anchor are not taxed until you withdraw them, and if held for over a year then you get long term gains rates.