What differentiates it from Visa is that there is literally nothing behind Visas numbers. They could be pure fiction right now and no one but Visa would know. Also, Visa takes a cut. As more and more of the whole economy flows through payment processors, they have become de facto taxing bodies. Their fees drain the economy, and can be used to manipulate the economy to Visas whim. A government-backed cryptocurrency would be provably legitimate, and would cut Visa out of the loop.

The FED can still be a central issuer, and a digital USD can thus still be considered a cryptocurrency.