In the end, it's impossible to police the use of strong encryption. Things like Waste and many others saw this coming back in the "Clipper chip" and PGP trouble days. What would end up happening is people just start appealing to OTP. Well-designed OTP is very resistant to attack.
This all reminds me of Neal Stephenson's seminal book, Cryptonomicon, one of the best IT fiction books ever written. If you have an interest in encryption, coding, data havens, currency, etc., this is the book for you. It's a veritable tome.
* Editing to say that despite Cryptonomicon being written in 1999, I still think it holds its own even now. Kind of a timeless classic as far as IT goes.