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It's not really like that in Sweden. A lot more would have to change in Sweden's national government; public policy, especially with regard to privacy issues, are amongst the best in the world. This doesn't mean a super-fascist regime is impossible in the future. But why would a shift away from paper money bring about the changes you propose?

Because with all transactions recorded it would become possible and when something becomes possible, oftentimes govts are tempted. As an exemple, where I live the govt cross-checks your income tax filing with the automobile registration records and if there is, in their opinion, a discrepancy, you have to explain yourself.

Also my comment does not single out Sweden, it is more of a general observation.

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