As Joseph Salerno has observed, the elimination of physical cash makes it easier for the state to keep track of private persons, and it assists central banks in efforts to punish saving and expand the money supply by implementing negative interest rate schemes.
A third advantage of the elimination of physical cash would be to more easily control people and potential dissidents through the freezing of their bank accounts. As William Grigg recently reported, federal regulators have the ability to freeze the bank accounts and credit card accounts of citizens, even without charging them with a crime or providing any other due process:
For having the courage to come forward and expose the drone program for the indiscriminate murder that it is, 4 vets are under attack from the government they once served. The U.S. Government failed to deter them through threats of criminal prosecution, and clumsy attempts to intimidate their families. Now four former Air Force drone operators-turned-whistleblowers have had their credit cards and bank accounts frozen, according to human rights attorney Jesselyn Radack. "My drone operators went public this week and now their credit cards and bank accounts are frozen," Radack lamented on her Twitter feed ... This was done despite the fact that none of them has been charged with a criminal offense...
Note: As of this writing, Radack's claims have not been confirmed by any other sources outside Grigg and Radack herself. I will update if new evidence comes to light.