Virtual currencies are created and held electronically and are not regulated by a central bank or other governmental authority. They are often used to buy goods and services online, but can also be used to purchase physical goods and services. Some virtual currencies are backed by real-world assets, such as gold or silver, while others are not.

Many online games, including massively multiplayer online role-playing games (MMORPGs), use virtual currencies. In these games, players can use the currency to purchase items, such as weapons, armor, and other items that can be used in the game. The currency's value is usually based on the game's economy and can fluctuate based on supply and demand. Some games also allow players to trade virtual currency for real-world currency.