Just like currency. All of those were imaginary since they were invented. People have create physical representations for currency in particular, but that doesn't change the fact that it's only a group of people agreeing on something that only exist on their heads.
Equally imaginary things are "corporations", "governments", "military"... If you push hard enough, even "person" fits that, but this one is deeply entrenched in people's minds.
It's literally true, though. Cryptocurrency itself doesn't suddenly render contracts unenforceable or the ability to use courts etc to resolve conflicts. What hinders it is anonymity of the other party, but that's something that cryptocurrency merely enables; whether to engage with anonymous parties or not is still a choice. It does not preclude you from, say, suing Coinbase if they owe you some BTC.
And, conversely, if you try to pay with cash to some shady people in a parking lot, there's not much good you're going to get out of courts if they defraud you.
