How is this insane? It's just about keeping very clear logs of the transactions, right? I's not like in the US they don't know where my money transfers are coming from.
I guess it's the thousand Euro minimum? CTRs in the US are min $10,000, but that doesn't seem like an overwhelming hurdle when the transaction is already being recorded somewhere. Most people auto-generate this stuff anyway.
It's unusual for a government to ask for recordings of individual transactions. Tax forms tend to ask for aggregate numbers on quarterly or yearly boundaries.
VAT administration tends to require transaction data.
For sales tax based systems, total aggregate turnover is enough; but to monitor VAT you'd need at least the aggregate volume grouped by all your B2B (VAT paying) customers and suppliers.
In unusual circumstances, like an audit perhaps. Many small businesses go their entire existence without sharing detail level transactions with the government.
So, when it's proposed, it's unusual, and is worthy of concern.