So I guess you basically defeat your own argument in the first paragraph. Digital money transaction are traceable, up to the point it left that currency system, say bitcoin to USD, and then someone else withdraw that USD as cash, after it become cash then you just know who has it last. All the off shore tricks are using "legal" method to transfer large amount of money or offset the cost to make their balance sheet look like they don't need to pay more tax. They don't ship aircraft full of cash to anywhere. This is why they want to form the tax treaty alliance so every government gets their fair share of tax cuts.

Do you know how hard it is to freeze someone's accounts so they can't function normally? Even the Fed, CRA can't really do that without court due process. You said no one hoard cash in any significant amount, it's only in first world where bank system is very trusted and reliable from abuse, that's why. If you check any in other 3rd world country with flaky government or authoritarian, they hoard cash in USD etc. The moment any government official touches any "dissidents" account without proper process you are asking for trouble for people to lose trust in that whole bank system. They have to announce it ahead of time, pass the act, run the whole deal to then freeze about 200 accounts. (from CBC article.)

And lastly, as with online misinformation campaign, despite a joke on our "very tolerant" gov that ignores proper protest process, those are not normal protests, and if it's allowed to run protest without check, then you are asking foreign influence to just throw money on you until you bent. Or like running some social test on how effective to use money to influence political decision through non-official channel. Can the gov do no wrong, nope, I don't think so. But at least in the west, they are treading a lot more carefully even with the power they have at hand. Similar to bank system, they can only wield it to not break majority trust, and politicians like their power like addicts like their drugs.