IMHO, I believe as an industry we should abide by the existing laws of the land, and cryptocurrencies are not exempted because we operate in our respective boundaries/countries so with that fact we should abide by the existing laws/regulation and the privacy coins like Monero, Zcash, etc. has superb privacy features that even a sophisticated government like the US are in a hard time to tract its transaction thats why they are afraid that it might be used for all illegal means like terrorism financing, etc. in that case I think we should ceased of using privacy coins for now.
Having privacy is abiding to the existing laws of the land. I never thought I'd see the day when people will see privacy as terrorism or illicit activity. If they want to focus on reducing criminality, fiat is the first and most powerful enemy they should confront. There's no way a cryptocurrency provides more illegal activity than a monetary system that's been alive for centuries does.
That is true, fiat has still the major role in terrorism or other fraudulent activities. And the government is having hard time to track them down. Now, they are after for the privacy coins because for them, maybe, it is easy to ban the usage of it because they can run after on the exchanges that are trading it. But I don't think all governments will prohibit the use of privacy coins, there will always a government that will accept them.