There is too much wrong about this to begin to debunk without a class in macro-econ. I'll simply start with your misconception surrounding cash for now.

Most modern countries create and distribute their sovereign currencies upon demand and via government deficit spending. This fiat system is essentially digital to begin with, so there is no "transition" needed away from cash.

Keyboards are stroked at the central banks and various government accounting agencies and money appears in the private sector to pay for the benefits and programs of those governments. Until that happens, there is no money in the private sector to pay tax obligations or purchase the government's debt instruments, so neither are "funding" mechanisms for their spending.

The US is unique from most others in one way . It uses its banking system to transact payments in the private sector in units of account that a denominated in US dollars, but aren't those dollars in reality. That unit of account is Federal Reserve Notes. It is also a digital entity that is created on demand when banks extend credit, but it doesn't have the ability to net retire its own debt or be net saved as a store of value as higher power money, US dollars and Treasury instruments, do.

Banks purchase "cash" using their reserve accounts with the fed to satisfy public demand. This is often seasonal and varies by locality as well. A large portion of the population is still "unbanked", or doesn't have access to digital accounts, or just prefers cash due to its almost universal acceptance. However, having cash doesn't insulate one from the dynamics and value of its digital roots in fiat currency and the central bank.