The reason why the regulators have been reluctant to give the green light to digital currency all the way is because they are worried that the digital currency market will be manipulated and become a tool for certain institutions and individuals to plunder everyone’s wealth.
That is a very broad statement you are making, starting with generalizing "cryptocurrencies" and not just bitcoin. For example majority of countries are reluctant to show any positive reaction to altcoins, specifically the ICO scams and the alternative names simply because they are scams.
But when it comes to bitcoin everything is different. There are lots of countries in the world and their stance goes from adopting it with open arms as a legal tender all the way to outright banning it and imprisoning anyone using it. But mostly the reason why any government is hesitating about bitcoin is because it is decentralized and they can't control anything about it. Otherwise they don't care about market manipulation and people's wealth!