GNU Taler[1] is an interesting middle-ground in the payments space: privacy-preserving for consumers, non-blockchain digital cash, and keeps merchant activity taxable.
I do worry about their whitepaper recommending it for a CBDC[2] (linked from [3]) which points out the state can implement negative interest rates, and that its architecture requires the issuer to get involved even in "spot your friend a $20"-level use cases. Since the issuer would presumably be required to KYC everyone, that also creates a big surveillance problem.