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Currency is a barriers bond that affords a degree of decentralisation-in-operation and use that isn't afforded by digital payments, even crypto for practical purposes.
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bearers* bond. Too late to edit.
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The boogyman is just what you described, and every democracy in the world absolutely does not trace electronic transactions.

Some have a more hands off approach, including size of transactions and flagged behaviour as indicators of when payment processors must report to the government.

The Goverment should absolutely have no idea who spends what, where. Warrants and court orders, check values should be required before anyone can know. The potential to suppress political opponents, to squelch legitimate protest, to interfere with elections, is too dangerous.

Simply because some countries, like the US after 9/11, decided to give up this aspect of a free people, does not make it right.

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AFAIK, in India, payments more than Rs. 50k is tracked.

In anycase, the governments have the capability, what remains is just the intend. And we see how intends could change at the whim of a leader.

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They do trace and log them, though.
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They do not. They have to get a warrant to get such logs from a bank.
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The Italian government has no power over foreign cards, and will be careful to not hinder those transactions lest they want to lose their tourism income.
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Yes, and this is a bad thing, and free societies are impossible without the possibility of payments that the government doesn’t want you to be able to make.

Cryptocurrency solves that problem well, which is why governments have moved hard to effectively nerf it everywhere.

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> the possibility of payments that the government doesn’t want you to be able to make

The idea that visa and mastercard provide these ...

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Visa and Mastercard don't, but right now cash more or less does. If the state has a monopoly on digital payments, and can thus mass surveil all digital payments without any scrutiny, the state has a huge incentive to disincentivize or bar the use of cash. Then all it takes is a bad actor to come into power and abuse the system.
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No more so than with visa or mastercard, who already hand over data whenever, and hand it over to a foreign government on demand too.

This fear of government services is toxic americanism.

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