The thinking is that as we’re rapidly going cashless anyway, the existing inventory of cash will diminish as it’s banked and removed from circulation.

This is happening already, but is expected to accelerate over the next few years.

I agree completely (and for the record I think that's awful -- I've switched to the only bank left in my country that still deals with bank notes) but that's a problem regardless of the status of CBDC as far as I can tell.