Are you confusing digital with electronic? Ones and zeros carved into a tree are still a digital record. Digital refers to the fact the you operate on a set of discrete values, in contrast to a continuum of values. Medium is irrelevant.
Just to be clear. I do agree with the argument above that "cryptocurrency" is a much more fitting term than "digital currency".
I suspect there are chemical compounds that when reacted can perform analog arithmetic. If you used that to create signing, hashing and propagation logic I dare say analog cryptocurrencies could exist.
It being digital is just its encoding. An analog cryptocurrency could be carved into trees or anything.