Giving that money to the level of government that controls the central bank is probably an improvement for incentive alignment over letting local governments keep it. Destruction just may not be the best way to accomplish that.
That sounds a bit anti-government but really I just meant that the money raised from fines isn't a significant part of the government's total budget so it's unlikely to have much influence on policy. Voters would pay more attention to the fines themselves than to anything that could be achieved with the money raised from them.
IMHO it's weird that the police even has something to do with speed traps, those should be handled by Transportation Department or some such.
On the other hand, governments get to print money if they want to, and they have reason to. This might work, but I suspect mostly it would be a complex way of doing nothing, thanks to the literal-money-printing option.
My understanding of the US problem with civil asset forfeiture is that money can be guilty until proven innocent there (and by its nature it's obviously not a fine).
Can you have a process where a bank balance is decreased without transferring the money somewhere else? Do you have to buy cash and then burn it?
You would need to withdraw the dollars as cash and then set fire to the bills. That would destroy them by taking them out of circulation. If you exchange them for literally anything else you want to destroy, you're just changing ownerhsip of the money, not destroying it.
Similarly, if I have some Euros, use them to buy USD banknotes, set fire to the USD banknotes, that deflates USD but not Euros. (Would that inflate Euros instead? Or deflate both?)