I just recently found out about Bitcoin, a digital currency that strives to be anonymous and have no central authority.
Instead of there being a single, trusted, centralized issuer of the currency, the entire network of peer-to-peer nodes, formed by people who use the currency, acts as the issuer of currency, and verifier of transactions.
The technical overview sounds convincing, and while there could be glitches I'm not aware of, I have no reason to believe right now that the system is technically deficient. It is already used in practice and accepted as a currency by a few.
But here's the bottom-line issue.
In order for a currency to be useful, you have to be able to use it to buy bread and pay electricity. Virtually all local government prohibits such transactions from using anything but the locally mandated currency.
In order for Bitcoin or a similar currency to become more than a curiosity, it has to be perceived as reliably exchangeable to a local currency.
In order to be perceived as reliably exchangeable, at least one country would have to credibly protect an exchange point between the digital currency and some other exchangeable currency.
That country, or group of countries, would then have to defend this courtesy, as the digital currency is used increasingly by folks worldwide to dodge taxes, and by mob lords to launder money from illegal activities.
As long as governments around the world maintain their irrational obsessions with making the drug problem bigger through prohibition, and making the tax problem bigger by trying to tax people's income, they will not tolerate an anonymous digital currency becoming more than a curiosity.
If any one digital currency threatens to become more than that, the US government will shut it down by outlawing exchange points within the US, and by outlawing transactions with exchange points outside the US.
They did the same to online poker.