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What is a Central Bank Digital Currency? Explained SimplyDigital money, or digital currency, is any form of money or payment that Digital money lacks a tangible form such as a bill, check, or coins. It is. Cryptocurrencies are digital tokens. They are a type of digital currency that allows people to make payments directly to each other through an online system. Digital currencies are assets that are only used for electronic transactions. They do not have any physical form, although they can be exchanged.