By “digital money”, most are referring to the chain of IOUs stretching from the Fed to your debit & credit accounts - a line of debt, with every penny tracked for who owes what to whom, and traced far enough is clear it all belongs to Caesar.
Yes, Bitcoin exists and is a viable attempt at a mathematical equivalent of gold, being completely anonymous (though what a bitcoin’s inherent value is escapes me) and a supply growth rate approximating GDP increase. It remains viable only because, to my ongoing astonishment, governments haven’t banned it yet.
Think on this. Who benefits more from untraceable anonymous financial transactions more than politicians? ;-)
It is semi-illegal in a couple of totalitarian countries. But it's very hard to prevent its use short of disabling the internet. I don't think it will be banned in most places... again, because politicians will be using it.
Actually, one of the biggest problems with bitcoin and its imitators is that all of them are designed with a finite supply set to be reached eventually. This inherent design flaw makes them interesting as collectibles and/or investments, but really lousy as currency.
Don't be surprised to see future digital currencies build on the strengths of bitcoin, while correcting design weaknesses such as this one.