If a country entirely phased out cash and replaced it with digital currency would it become destabilized?
Firstly for that to happen, the entire country would have to be super advanced, and the only country that I think could do this would be Japan. The country would only become destabilized if the currency that they swapped to was decentralized such as bitcoin, or not made by the country itself. For fiat currencies to go, people need to be trusting in the new currency and it would have to have clear benefits over fiat currencies.