Digital currency makes it easier for the government to seize some or all of it's citizens money.
https://cashmoneylife.com/can-the-us-government-seize-your-401k-or-ira/
There is also the fact that for the government to keep increasing it's power it knows it has to control the people to prevent an uprising. And to control the people, the government must control freedom of movement(i.e. digital currency, the TSA, Driverless-Cars). Think 10, 20, 40yrs from now.
I know they can they can do all that. Why having physical PM is a way to counter act that. But all that relies on power, it that was to fail for a period of time cash & PM are king. BC is useless without power.