Definition ∞ Cash instruments are highly liquid financial assets that are immediately convertible to cash or already represent cash equivalents. Examples include physical currency, demand deposits, and short-term government securities. These assets are characterized by their stability and ease of access.
Context ∞ In digital economics, cash instruments provide a reference for the stability and utility that stablecoins aim to replicate. They serve as foundational assets for collateralization in decentralized finance protocols and for settlement in traditional markets. Understanding their function helps clarify the design and risk profiles of various digital asset offerings.
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