You've nailed it. The article's definition of "cash" is misleading and your example of Cyprus is spot on. Very few people have much actual physical currency on hand and are woefully exposed to the risk of bank runs. "Normalcy bias" is certainly not a preference for physical cash, but rather the complete disdain for it. Why anybody would wish to lend large amounts of money to present day banks in the form of savings deposits or CDs is beyond me. The potential coming bank "bail-ins", a la Cyprus, will leave many depositors with smaller accounts and more limited/restricted access to them.
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