If a country entirely phased out cash and replaced it with digital currency would it become destabilized?
It is not form of currency but peg value which matters while counting stabilization or destabilization.
Peg value refers to value of reference coin or asset on which value of coin depends. So when country decides to opt for digital currency instead of hard cash, what really counts is whether that digital currency is pegged to fiat money of country or being left to free play of market.
If pegged to fiat money, it will be just hard cash on internet. For example, E-Dollar or USDT.
But if being left to freeplay of market, its value will appreciated or depreciated every second owing to market and create dynamic unstabilised economy.