Fair enough on credit card and paypal being a medium of payment. But it's no different than bitcoin...since ultimately bitcoin is nothing more than a means to ultimately convert to fiat somewhere along the chain.
If I use all the governement-backed paper money which I receive to convert to silver, will the paper money which I receive just be a medium of payment?
And show me any country that official defines bitcoin as a 'currency' and not loosely as a 'virtual currency.' There's a fine difference. One is backed by governments and power...the other are not.
In Bitcoin, people doesn't care or doesn't want to have it backed by the government.
Also, gold and silver still remain as currencies, even without government backing. The same applies with Bitcoin.
Even more, soreiveign currencies out of circulation still remains as currencies. They just loose the legal tender status, but all ther other properties of a currency are here.