Why is Cash Collateral Important in the Digital Financial Ecosystem?

[Suba]

Cash collateral is collateral in the form of cash and cash equivalents. However, nowadays, cash collateral doesn't always have to be cash and cash equivalents, but can also take the form of commodity collateral, stablecoins, and securities.

In everyday life, we often encounter savings accounts or time deposits used as collateral for bank loans. This way, customers don't need to liquidate their deposits to obtain funds.
So, why do you think cash collateral is so important in the world of digital finance?

 

[Kross]

In my country, people use their fixed deposits as collateral. That helps people that don't have tangible assets but liquid cash to obtain loans.