We need both regulated and unregulated financial markets. Blockchain as a technology leads to unregulated financial market becomes a thing.
But we don't want it become too big. There is still kinds of businesses we don't want to have access to large scale financial infrastructure. Like money laundering or drug trade or human trafficking or child pornography. To keep this at bay we need stuff like KYC/AML checks on major exchanges.
Also paying taxes in crypto plus establishing blockchain control over government spendings will be an incredibly powerful combination for a better state.
That's basically the reasoning behind orderbook.io exchange implementing KYC, Docusign, accredited investor verification, getting licenses to trade BTC, ETH and tokens in all 50 states and in the process of getting licenses for private securities and public securities issuance and trading.