There is an ongoing and long running debate whether cryptocurrencies are means of payment or commodities. Therefore, the treatment of holdings and trade depends on the distinction between digital assets that function as currencies, securities and assets, and REGULATION (limitations of its use by corporations and individuals).
The legal status of cryptocurrencies varies substantially from one jurisdiction to another, ranging for LEGAL to completely ILLEGAL.
Naturally, the attitude of authorities is influenced more strongly by interest groups and particular motivations, particularly its own protectionism of the traditional banking and commerce.
Goverments might argue crypto is being used to bypass AML (anti-money laundering policies) and more serious criminal activities. Strict Regulation and Bans are allegedly intended to protect citizens, but such restrictive policies only limit financial freedom and do not prevent crime.
People should know crime is the act and the reason to commit it and does not make the means illegal per se.
For instance, the wrong association of crypto and illegal activities, is due to the early uses of BTC as payment method in Silk Road ( hub of criminal operations). Why should that make BTC or any other crypto illegal?
Fiat currencies have been used for decades for legal and illegal transactions, because they are the underlying medium of exchange, nothing more.
Limitations on tranfered funds and monitoring is pervasive for FIAT and even more so for CASH and CRYPTO.
Crypto is illegal or limited because it lacks the protection of governments.
In the end, convenience overcomes any barrier, including political ones.
Awareness of the potential of crypto as an alternative currency and the desire for financial freedom has contributed to its adoption, specially in countries where banking and commerce are underdeveloped or tightly control by the State.
No matter which COIN/TOKEN, be it an stablecoin or not, attains a supreme status. A descentralized currency is the most effective UNIVERSAL MEDIUM OF EXCHANGE, one that could enable true free commerce independent from politics and its associated interest groups.