LeoGlossary: Cash

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Money in physical form. It is legal tender, in either paper or coin form, that can be exchanged for goods and services.

In accounting, it is an financial asset that is in the form of currency or currency equivalents. These typically include:

Cryptocurrency is viewed as an alternative to cash. It seeks to serve a similar purpose. The difference is, being a virtual currency, that it is operated on and according to the rules of blockchain as opposed to the monetary policy of the Central Bank.

Under Central Bank Money, cash is typically in the form of banknotes although coinage also qualifies. It is recognized as a liability on its balance sheet.

Over the last few decades, due to advancement in technology and FinTech, cash has diminished in use. This is not only true for transactions of individual but also settlement. Since currencies such as the US Dollar are essentially digital, this has become the new medium of exchange.

A big reason why is the speed which transactions can occur. There is also the safety where one is not having to tote around or secure large sums of physical money.

Smartphone technology also aided in the decline in the use of cash. As people gained access to payment applications, the need to carry around physical cash was removed.


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