However, the next real step in that direction is to develop "securities" like money market instruments, which are denominated in an existing currency, but are "traded" not by institutions, but by people and/or business on the internet, in order to meet very real needs, like selling software, information, entertainment, etc.
Your Fidelity Mutual Fund account is denominated in dollars, held in stocks, and clears through the ACH system. Sounds pretty close to me. Right now Fidelity nominally sells your stock when you withdraw and buys more when you deposit (in practice they net their customers against each other, I'm sure). Suppose you write a 'check' (it's not _really_ a check, just very close to one) on your Fidelity account and someone else deposits it to their Fidelity account. Fidelity can do an "on-us" clearing of the check and it never leaves Fidelity's hands. Only some accounting records have changed reflecting a change in the distribution in funds. Make this kind of transfer fully electronic and you have the beginnings of a fully private currency. Eric