It's technologically feasible to create centralized digital cash that is much more anonymous than physical cash. You can do it by using zero knowledge proofs wh

It's technologically feasible to create centralized digital cash that is much more anonymous than physical cash. You can do it by using zero knowledge proofs where you have vouchers & nullifiers. It's virtually the same idea that powers Tornado Cash. It's tractable but challenging, every single transfer of a digital-cash note would necessitate an entry into a public Merkle-tree. You could mitigate this by introducing a multitude of denominations (a separate Merkle-tree for each one) trading some anonymity-set size for the mitigation. Another possibility is to introduce special cash pools that have expiry dates, incentivise their use with lower transaction costs. The transaction costs would have to also be ZKP vouchers but much more flexibility on those, such as rapid expiry. If a government was crazy enough to do this, they would give up all control over how the money is spent. The only control they would have is whether or not to shut the whole thing down. Discrimination would not be feasible, reversing transactions impossible. They could still print money of course.