The system works if democracy works. If we lose democracy, of course, the blocks built on top of it would crumble. That does not means everyone should stop building on top of democracy. Even more so for things that makes the life of the people better.
You really don’t want the folks in power to have even more of that kind of power, no matter how convenient it is most of the time.
At least Visa/MasterCard, etc. mainly just care about making money. The gov’t doesn’t even have to care about that!
Using ‘we’re currently in a democracy’ to justify creating an even more tempting and likely to be abused tool of oppression is not a good idea.
In your hypothetical scenario of nazis taking the gov, lets assume there is no central database. Nazis would go: ok banks give me your databases or else. Banks gives databases because they care about money. There, now nazi have central database. And in this scenario you have deprived the people of enjoy a really nice service.
Where is the win here I don't see it. Let's not do good thing because, oh, in a doomsday scenario good thing might be bad. Like, shouldn't we channel efforts in ensuring doomsday never comes to reality in the first place? This way we all enjoy good life with ever improving services.
I’m also pointing out not-that distant past events, and you’re also just completely ignoring them.
Good luck! Just don’t do it in my economy.
All the transactions are controlled by multiple independent parties, whose interests do not align to do that as they’d lose their customers to their competitors when it came out what was happening.
Some of the data does go through central clearing at some step (ACH, Fedwire), but credit card charges, Zelle, cash, checks deposited at the same bank, etc. do not.
With cash, you stay out of those databases in the first place.
Definitely not impossible, but much harder than if there was a single centralized system - dramatically harder.
Cash is king though, as you say.