But, collectively, this is not a possibility except at highly punitive discounts. Why is it not possible for everybody to convert claims to currency into currency at once? Because a large fraction of those claims – say, fixed income bonds or equity issued by companies – is backed by the issuers’ long-term investment projects.
When starting those projects, firms and other productive agents raised currency by issuing claims whose maturity was expected to match the productive cycle of their underlying real investment. But the underlying real investment cannot be liquidated instantly, except in fire-sales that are highly destructive of their realised market value.