Which is still a cryptocurrency, with the same system of tracking as Bitcoin. The only difference is that Monero also encrypts transaction data, making it impossible for anyone except the wallet owner to trace their own transactions, all while the network is secure from cheaters. Monero is a great solution for private transactions. Bitcoin on the other hand was not designed primary for privacy, but for decentralization.
A insignificant difference, show me a more privacy friendly method of sending money digitally and I'll listen. Monero and other cryptocurrencies excluded.
Also, the most common scenario for cash is you withdrawing the bill from an ATM, which means your face will be caught on camera and identified with timestamp. You make the payment in a store, that has camera surveillance, once again your face is on camera with a timestamp and location. The store then sends your bill back to the bank. How's that more privacy friendly in your world?
Without tracking someone could cheat. Even cash has a serial number for tracking and cameras on every ATM. Best you can do is to make it incredibly hard to tie a identity to a chain of transactions.
If you by "physical money" refers only to metals and bartering. It's all about control, not about the medium. The world is changing and physical stores are disappearing in favor for online markets. Same thing happens on the black market, whether it's outright illegal stuff, or simply stuff a tyrannical government don't want you to have, like guns.
At some point you will have no other choice than digital payments, so the question is. Will you use "their" tyrranical system where you have no privacy, no control and no security. will you try physical, such as "cash or gold by mail", knowing very well that the delivery man could easily rip you off and disappear.
Or will you use a privacy focused cryptocurrency, such as Monero for instance, payment arrives instantly, no tracking, nothing to block your transaction. And the only thing you'll ever have to worry about is if the seller is honest and send you whatever you purchase, which would have been the case either way.
The governments wet dream is about control, not about the medium. They don't give a fuck about medium. If Chickens could speak and happily would rat you out for a few crumbs of bread, the government would use live chickens as currency.