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It is not outrageous at all. In most countries creating, controlling and backing money is by law the job of the government. This was defined a long time ago to protect citizens from counterfeit money and to have a secure and stable currency.
Bitcoin on the other hand was developed somewhere in the dark and new money is continuously created.
I personally think that all governments should open their standards about money and there should be a new system.
Illegal in what way? Are you going to jail if you are discovered to possess a bitcoin wallet?
What country are you from? Do you really have a law that bans crypto? Because you can say that crypto is not only a currency, but also a commodity (same like gold or oil) or shares.
VomBa3133yWell, in my country you can't even pay online, or move your money abroad without central bank permission, in other words, you don't own your money.
And bitcoin which the gov probably know nothing about will definetly get you money laundry charges.