Crypto-currency and regulated electronic currency are not the same thing.
Look up the meaning of crypto-. It means secret or hidden. Muslims have a crypto-currency call Hawala that has nothing electronic about it that works in some ways like bitcoin.
Trust me, I know how it works.
It is easier to track illegal activity with Bitcoin than it is with cash. Your suggestion that it is for nefarious purposes is like suggesting that $100 are just used by coke dealers.