CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
US English

What is cash?

Learn more about cash

Cash definition is a monetary measure that performs three jobs: it is a medium of exchange, a store of value and a unit of account. That means that it can be used to exchange goods and services, to savings value and to measure one’s wealth. Cash is the most liquid type of asset.

Traditionally, cash meaning is that of money in the physical form of currency, such as coins or banknotes. Although cash typically refers to money on hand, the term can also be used to indicate money in banking accounts, checks or any other form of currency that is easily accessible and can be quickly turned into physical cash. 

Where have you heard about cash?

Literally everywhere! As a term, it covers both physical cash, such as pocket change, as well as vast sums of virtual money that each of us uses on a daily basis.

What you need to know about cash...

Cash has been used for as long as goods and services have been exchanged. Its form varied from country to country, depending on the culture in which it was used. Early civilisations used seashells, sugar, salt and other commodities of weight as payment means. As time passed by, many nations switched to coins struck from precious metals, including silver, gold, bronze and copper.

As the world economy developed and silver supplies increased due to the colonisation of South America, coins became larger, and a standard coin for international payment was finally developed.

In the early 17th century, English East India Company coins were minted in England and shipped to the East. Over time, the word “cash” was adopted from Sanskrit.

Meanwhile, paper money was developed. In the 18th century, important paper issues were made in colonies like Ceylon and the bordering colonies of Essequibo, Demerara and Berbice. The ability to create paper money made nation-states responsible for the management of inflation through control of the monetary supply.

It also made a direct relation between the metal of the coin and its denomination unnecessary. From 1816, coins have generally become token money.

In modern times, cash consists of banknotes and coins, whose metallic value is rather negligible. This modern form of cash is referred to as fiat currency.

Presently, cash has become a very small part of the overall money supply. Its remaining role is to provide a form of currency storage and payment for those who don’t want to take part in other systems.

Most cash these days is in electronic form, despite our attachment to the idea of banknotes and coins. Online banking, smartphone payment technology, checks, debit cards and credit cards have decreased the need for people to carry physical cash in any form. The concept of a “cashless society,” is the idea that in the future cash will be redundant and fully replaced by electronic means of transaction.

Related Terms

Latest video

Latest Articles

View all articles

Still looking for a broker you can trust?

Join the 610,000+ traders worldwide that chose to trade with

1. Create & verify your account 2. Make your first deposit 3. You’re all set. Start trading