Which of the following is a significant drawback of using cash?

Using cash as a form of payment indeed has notable drawbacks, one of the most significant being its susceptibility to financial crime. Cash transactions can facilitate illegal activities such as money laundering, theft, and tax evasion, as they are often harder to trace compared to digital transactions. Without a digital trail, it becomes challenging for authorities to track where cash has come from or where it is going, providing opportunities for individuals to exploit cash for illicit purposes.

In contrast, cash being able to be easily invested is misleading, as cash typically does not earn interest or grow in value like other investment vehicles. While cash transactions are private, they are not entirely anonymous, as significant transactions may still attract scrutiny from financial institutions or law enforcement. Moreover, while the storage of cash can come with its own challenges (such as safety concerns and physical space), storing it isn’t inherently easier than digital currency, which can often involve wallets or secure apps that mitigate the risk of loss or theft.