Physical cash CAN lose value. Very fast too.

My parents lived through the hyperinflation in Yugoslavia in the 90's. The stories they tell are ... fun. Ideally you exchanged everything into deutsche marks as soon as you got it.

New denominations were being printed every few weeks because the currency was losing value etc.

Hell, even when we became Slovenia I remember that at first, the highest bill was 1,000. Just ten years later, the highest had to be 10,000 because the thousand one just wasn't cutting it anymore. It was too impractical for the prices.

For a more drastic example: in pre-war Germany it was more common to get mugged for bread than for cash. Wads of cash just weren't worth enough to bother.