We as a society use 'currency' as a common method of trade so we don't need to barter anymore. The currency, as long as it's commonly accepted, really can be anything at all. Governments like fiat money because it's easy to tax, of course. "We" like fiat money because it's easy to use, liquid, and 'common'. The liquidity I think, right now, is key.
I think, more to the point, people as a whole are scared of change.