Blockchain tokens are created from Smart Contract, an advanced feature of Blockchain. This enables users to create assets that transferable. Technically, everything that exists on Blockchain is data.
A creates a type of token Z that pledged to USD as a median of exchange. Token Z is actually recorded by a Smart Contract on Blockchain that verifies its value is always equal to USD. A actually does not create any physical assets, but a Smart Contract that records the existence of token Z, and tracks the movement of token Z, or even its ownership.
B accepts token Z and willing to trade some goods, or even fiat for token Z so that he can use token Z to achieve something else. Then, they make a trade. In this case, value is created from thin air. The good thing is token Z cannot just disappear as everything is recorded on Blockchain in an order of time. It’s a trustless system as any movement is reported by Blockchain. Of course, B can send token Z to anyone he wants regardless of borders, or administration. That’s the strongest point of Token Z.