-cut-
It might be so, but AML has been here for years now, and still people use paper cash and sometimes digital payments. This problem will exist and the governments are slow to control it.
-cut-
Even without AML, it's just impractical for stores to hold large amounts of paper cash. It's a security risk, and security for banking that money costs additional money.
Digital payment modes are there, most of the younger generation have adopted it, but they have not started using bitcoin. So cash is still king. Of course I am using the term cash to imply all sorts of fiat money, physical or digital.
AML laws have been developing, and are changing radically. And while travel rule might not yet be a thing in some countries, changes are coming. Reason why they might not have an effect where you live is, because we are in transition phase, so it takes time to see results of these new regulations, don't be surprised when you suddenly do.
Removing ability to pay large amounts with paper money is slow procedure that can't be rushed. Suddenly changing rules could be catastrophic as supply chain isn't ready for it.
Also didn't even mention bitcoin. I was separating paper money use from fiat money use, because even when they are representing the same thing, cash money is anonymous. So there are obvious differences how they want to deal with paper money compared to digital fiat money.