Digital cryptocurrency is based on cryptography and network P2P technology, which is generated by computer programs, issued and circulated on the Internet. Generally speaking, digital cryptocurrency can be used to exchange legal currency, purchase certain goods, services or as an investment tool.

Virtual currencies can be divided into three categories. In the first category, there is no exchange relationship between virtual currency and legal currency, this can only be obtained and used in online communities, such as World of Warcraft G coins. In the second category, the virtual currency can be obtained through legal currency to purchase virtual and real goods or services, but this cannot be exchanged into legal currency, such as Amazon coin. The third category, virtual currency and legal currency can be exchanged for each other, this can be used to purchase virtual and real goods or services, such as Bitcoin. In 2012, the European Central Bank considered digital cryptocurrency as a virtual currency.

The essence of electronic currency is the electronization of legal currency, such as bank cards and third-party payment platforms. It is backed by government credit, which is more convenient and efficient than paper legal currency, thus can increase the liquidity of currency to a certain extent. The introduction of electronic currency, especially third-party payment, has made a huge impact on traditional commercial banks. On the one hand, electronic currency is a currency that is issued through electronic networks and can be circulated on a global scale, which will break the monopoly power of a central bank in issuing currency. which makes the central bank of a country monopolize currency issuance. On the other hand, the diversity of electronic money will invisibly weaken the scale of bank credit, and it will also shake the foundation on which banks rely for development.