Ed --

Sure, I can take a stab at it! I will of course offer the following up with the caveat that I don't really consider myself an expert on monetary policy (and that's what we're talking about) so this is perhaps best taken with a grain of salt. I'd also love if others chimed in and clarified this explanation.

My short answer is "because leaving money in your mattress is annoying and expensive."

So like, what do I mean by that? Well, think about it this way: it's probably feasible to locate $10,000 in bills and put them under your mattress. If you were to use $100 bills, you'd be able to store about as much as $900 Million before you are taking up much more space than a car (at least according to this analysis [https://87billion.com/], which uses a $1 bill instead of $100).

So far this sounds great, but we need to wonder whether this is really feasible for many of the modern uses of money. It might be a decent path for a private investor who is primarily interested in preserving the value of their capital, but for those whose assets serve strategic purposes it can be limiting. Just think about how hard it would be mechanically for multinational corporations to transact in cash. For Google and Fidelity to invest $1 Billion in Spacex [https://techcrunch.com/2015/01/20/spacex-raises-1-billion-in-new-fundin…], would they have shipped over a physical pallet of cash? How much would it cost to secure and transport that? Also, what about the (material) probability that some of it goes missing?

This excellent post [https://jpkoning.blogspot.ca/2015/01/the-zlb-and-impending-race-into-sw…] makes the point that 1000 CHF notes are pretty much the perfect vehicle to do this with, but further makes a number of very interesting points, not least that central banks will not like you very much if you hoard paper currency and very well might take action to make your life unpleasant, especially at scale. Miles Kimball has written lots of smart stuff [https://blog.supplysideliberal.com/post/62693219358/how-and-why-to-elim…] on this that is not easy to compress. However, a question worth considering (that will, I hope, get you to read Miles' stuff) is "what does the hoarding process look like as governments move away from paper money?"

Anyway, I hope this is a helpful beginning. I will continue to turn this over and hopefully pull more organized thoughts together into another post.

All best!

Will