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?
So basically you are talking in favor of strict KYC norms for the crypto currency user and you think that it would progress the market by effectively eliminating the criminals from the system! I don't think it will help the cryptos grow in the way of progress, instead it will make the Banking Cartels stronger and they will continue to have the upper hand to your own financial decision. Cryptos look good in its original way. Any attempt to temper with the originality will only create roadblock from the crypto community.
Regulations are somewhat necessary but over-regulation will kill the entire market and we will effectively transfer the power to the regulatory authority to take financial decisions on our behalf. That's not good and I would not favor that!