There's an enormous hole in this conversation. Everyone is talking
about malevolent government, data collection and cybernetic social
control as the great threats. Yes, these things are frightening.
Authoritarianism/fascism or surveillance capitalism, whatever you want
to call it, is in the rise. But malevolence is the lesser of our
worries with regard to the prospect of a "cashless society".
Cash is important not only because (as others have said) it is a
mature, near perfect technology that provides fluidity, anonymity etc.
It's important because it's a distributable store of highly resilient
wealth.
Physical cash is one of the greatest defences a society has against
total civil disintegration - the kind of "worst fears" we are all
terrified of when the pandemic or Capitol riots were looming. People
in the streets with guns killing each other over a loaf of bread. It's
the sort of thing we worry EMP attacks, nuclear war, overnight
hyper-inflation would bring. When chaos comes it can come very
quick.
One of the surest and fastest routes to a totally precarious
civilisation is to create a "cashless society" than runs on these
highly unstable and very new-fangled things we call computers (we've
had them "properly" for about 20 or 30 years).
Imagine that there is no physical cash at all. Cash acts as a buffer,
like power-supply smoothing capacitors. One day the systems all switch
off (a very likely scenario (some time - we don't know when) by all
cyber-threat accounts). Modern people, within one or two generations,
are losing the ability to value or barter things, or do simple mental
arithmetic in many cases. That level of dependency is catastrophic.
Fortunately we still teach how to add up money and caculate change at
schools.
When no-one can buy food, and no-one can fuel vehicles because the
"system is down", watch it all descend into madness within 24 hours.
And no, the police/national-guard won't help. They'll all be shitting
themselves too and worrying about their families, getting paid.
Ayn Rand (not someone I am very fond of) made at least a few rather
intelligent philosophical observations, one of which is that (I
paraphrase) "money is a peace-keeping instrument". Cash gives a
society it's own form of distributed "power" which allows a momentum
of local exchange and flexibility. There only needs to be a few tens
of millions in circulation. Right now most folk have a few hundred
bucks at home or on their person. Without it your fallback is, within
days, only people who have stores of gold, medicines and weapons being
fucntional. That might be great for "preppy" survivalist types, but
it's not a world I'd like to live in.
Any government that eliminates physical cash entirely would be
clinically insane and playing a very, very dangerous game. Given all
the cyber-threats movement toward a "cashless society" is utterly
premature from a safety perspective, regardless any social politics.