The term digital currency refers to money that exists exclusively in digital form, without any physical counterparts such as coins or notes. This includes cryptocurrencies like Bitcoin, which operate on decentralized networks using blockchain technology, and central bank digital currencies (CBDCs), which are issued by governments. Digital currencies facilitate online transactions, offering benefits like faster transfers and lower transaction fees. They also introduce challenges related to regulation, security, and volatility. Understanding digital currencies is essential as they reshape the financial landscape and influence global economies.