Associations have been slapping fines on clubs involved in incidents of racial abuse during games but prejudice remains one of football's biggest issues.
Indeed, Juan Aurich striker Luis Tajeda walked off of his side's Peruvian league clash last week after being the subject of racist abuse from fans. The player was booked for his actions and the team were forced to see out the remainder of the game with 10 men.
Blatter believes that one day racism will be wiped out, but feels that more extreme measures need to be taken in order to tackle the issue.
"The biggest problem we've had in recent days here in this continent is racism, discrimination. This is unacceptable," the Swiss told presidents at the Conmebol conference in Paraguay.
"We must deduct points or relegate a team. The moment we have the courage to do that, discrimination will end.
"I think that one day racism will disappear from football... but that's not enough; we need new conditions.
"We have the regulations but they are not being applied in the whole world by the disciplinary and control bodies."
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