As we all know that one thing that might hinder the acceptance of the bitcoin system for the government is the hidden identity of the members. Local exchange should do intensified KYC so as to avoid the system of cryptocurrency being abused by other members as well like money laundering, funding of terrorist groups and others as well. Some of the country had done this things already and the question is would favor to do KYC on your local exchange?
There is no way out of the KYC system and the issue of identity is a settled case if bitcoin will become mainstream but I really don't understand why people are skeptical about it because the same people who have bank accounts and use their account to carry out crypto related activities are not willing to share their information on an exchange site. Eventually, we will have to decide which one are we able to live with because government that would allow exchange sites to operate within its jurisdiction would want to keep an eye of everybody transacting on such platform not because of those who just want to carry out some little amount of local currency equivalent, but those who are bent on carrying out illegal activities by circumventing the power of the state.