I would not be very optimistic about the fact that cryptocurrencies can fundamentally change something (at least at this stage of development). It is enough for governments that they control fiat, which means all crypto-to-fiat gateways. This means that, if they wish, they can receive all the data necessary for KYC and taxation.
but even so I don't think it will eliminate the fact that regulations lag far behind technology and technology will always be ahead of the rules they make. and what is happening at this time crypto is included in one form of technological sophistication and they will not be able to pursue it even if accompanied by strict rules and taxes, crypto is still always in front of them and it is very difficult to follow it
Regulations are build around an existing concept. So there's no way that an existing regulatory framework will cover future innovations. It's stupidity to expect it. Regulations are usually made by government bodies and beaurocrats who are not visionaries.
Just take a example of bitcoin itself. Since it is not a traditional asset, many governments are finding it difficult to regulate. So they are debating on what kind of regulatory framework can be designed for it. So we must not expect that every new innovation will sit under the existing regulatory framework.
from this alone I have got an idea that it will be very impossible to do because even if they make all kinds of policies, in the end bitcoin will stand strong in other ways.
on the other hand about bitcoin it is the same and it can't be denied that bitcoin is something that the government really doesn't like because it's not a traditional tool, and the government is not ready for things like this so they make several kinds of arguments and unclear regulations about crypto and bitcoin in hopes of quelling this. but they made a big mistake and just did the wrong thing
