There are three forms of “Currencies” in the digital world, as shown in the diagram below:

First form:
Centralized payment systems like PayPal, Square, and real-world fiat money are in circulation. Pledge is required in a third-party authority. Debit and credit cards digitize paper money and turn it into digital currency. Only “accounts” change in these cases, but “currency” remains the same. These systems help bridge the gap between the physical and digital worlds. Each country’s central banks issue currencies, so these currencies rely on traditional financial methods. When two make transactions, this payment system will be the trusted third-party agency.

Second form:
Airline miles, credits, or Costco points, are not mapped to a real-world currency but issued by organizations or large corporations. You can only use these in their internal system but not in external markets.

Third form:
P2P digital currency like Bitcoin, peer-to-peer, no third party is involved during money issuance and transaction process. Computers will execute automatically in the distributed network. This process is entirely autonomic and spontaneous.