A digital currency, or cryptocurrency, is an electronic currency which employs encryption as a security measure. Public key encryption, hashing and digital signatures are some of the forms used to provide security.
Cryptographic currency is often compared to legal currency. A "legal currency" is a currency whose value is guaranteed by law, such as the Japanese Yen or the US Dollar. Legal currencies are also know as "fiat currencies."
E-money and other third-party payment methods are not considered "cryptographic currency."