Remember a single fire could destroy that if you just stacked it on a pallet. I agree 8.12 million is probably too much, but even handling e.g. USD $1 billion costs a lot (you have to bring them from the central bank I suppose?). Even having a company that has enough capital and is trusted enough costs a lot of money.
I think the principle shouldn't be "Interest rates will never go below zero", but "Interest rates have a lower bound", which still stands I suppose.
Well then what is the lower bound? The standard way to prove inequalities that should exist in a free market is through showing arbitrage patterns. This way one can prove f.eg. that a call option should never be more expensive than the underlying security, or that a call plus a put is essentially a futures contract.
How do we show the lower bound on bond yield rate? Arbitrage executed through a company that employs exhaustive security measures allowing its clients to store pallets of cash? It still depends on time-varying factors, such as employee costs, utilities, the probability of a random natural disaster or the probability of a fire wrecking the entire building.
Yes, that lower bound is a function of all those things: security costs, labor costs, etc. They can be laboriously approximately quantified. But it surely exists: for example, it's inconceivable the rate to ever reach -30% because storing money will never get that expansive in normal conditions (please discount apocalyptic scenarios).
I think the principle shouldn't be "Interest rates will never go below zero", but "Interest rates have a lower bound", which still stands I suppose.