> generally illegal in pretty much any place that has income/capital gains/wealth taxes

Authoritarian governments typically enforce fiat currency to monitor citizens, especially those with financial ties to anti-establishment entities. They couldn't care less if you're trading tomatoes.

> Authoritarian governments typically enforce fiat currency to monitor citizens

Source? Despotic governemnts in the real world are kleptocracies. They're using all manners of currencies because their elites spend what they can steal.

That isn't generally true, what real world autocratic regime do you have experience with? You can have less government theft than in more democratic countries, because favorable economic conditions are one way of buying compliance. Take the largest dictatorship in the world: China. The CCP does not take "what they can". The tax burden is much lower than basically in any liberal democracy in the West. A lot of taxes that you may think are normal simply do not exist, property tax for example is not a thing. They have heavy foreign exchange restrictions, to keep money in the country. Many people working in China are able to save a lot more of their income than they would if they were in Europe or North America. The catch is you can't freely use all manners of currency, you can't even easily exchange to USD as a Chinese. Foreign stock ownership is restricted. Cryptocurrency is banned. It's basically the complete opposite of what you described.

> take the largest dictatorship in the world: China

China has semi-effective capital controls, at least on the hoi polloi. (There is massive leakage via Hong Kong and Macau, but that's for the hoi olligoi.) China also has a thriving cash culture, which undermines your tracking motivation argument.

Look at authoritarian countries broadly, however, and you find a mix of strict capital-control regimes to maybe something on paper but zero enforcement [1]. To the extent they have capital controls, it's generally to defend the value of the currency. Not for surveillance. Conversely, thriving democracies have enforced capital controls (again to defend their currency).

Capital controls are not an authoritarian-only policy tool. And the principal motivation for capital controls, i.e. requiring the use of domestic currency, across history, has been economic.

> CCP does not take "what they can". The tax burden is much lower than basically in any liberal democracy in the West

Straw man--nobody claimed the CCP or anyone else takes "what they can." Your metapoint is correct: China is the 34th lowest (7.7%) and the U.S. 184th (12.2%) [2]. But that number doesn't include what the elites extract [3].

[1] https://worldpopulationreview.com/country-rankings/what-coun...

[2] https://en.wikipedia.org/wiki/List_of_sovereign_states_by_ta...

[3] https://www.icij.org/investigations/offshore/leaked-records-...

This doesn't explain why surveillance is required on the buyer's side. Why can't you go to a retail store, buy an anonymous prepaid debit card for cash and then use it to make purchases over the internet without giving anyone your social security number? The cash you're using has already been taxed.

> Why can't you go to a retail store, buy an anonymous prepaid debit card for cash and then use it to make purchases over the internet

Because when this is made available in practice like 99% of the volume is tied to crime. 99% of users aren't criminals. But criminals use it at scale in a way that dwarfs licit activity. (Without tracking how much each person is using it, you can't cut off the scale users.)

This is just assuming the conclusion. Anonymous purchases should be the default, so that ordinary people aren't baselessly subject to mass surveillance. At which point you'd have to be arguing that 99% of all purchases are criminal, which seems implausible.

To protect the kids of course! How ever could the government prevent all of these awful crimes against children unless we surveil everything. Like I always say, if you have nothing to hide. . .

Is what I imagine some spook told the lawmakers. Sarcasm aside, I believe it is control.