Which a large reason why people use banks. Even if someone breaks into the bank and steals the exact bills you deposited, you don't lose any money. Crypto is closer to cash in that it's anonymous but not private, with the advantage being you can send money wherever you want in the world without mailing an envelope of cash. But like cash if you send it to the wrong place, or someone finds it, it's gone. The decentralization is great because it means no single entity can say "That's it, you can't send money to XYZ anymore" but the usecase is still smaller than cash (maybe not forever), or a bank account (probably forever).

US currency has serial numbers printed on both sides of the bill, and while you might be able to cut it up in such a way that they aren't included, I believe they also put it in the watermarks, so even if there is a strategic way to cut it that hides the watermarks and serial numbers, I think they'd start to catch on before you made much. It's an interesting thought experiment though. How many banks would you be able to try it at before they caught on?