What happens to your money when you deposit it?

So, I'm curious. When you deposit your hard-earned cash into a bank or a cryptocurrency wallet, what exactly happens to that money? Does it just sit there, waiting for you to withdraw it again? Or does it get invested or loaned out in some way? And what are the risks and benefits of keeping your money in these different places? As a responsible investor, I want to make sure I understand all the ins and outs of where my money goes and what it's doing. Can you help me understand this better?