I think it has been relaxed a little bit later on, but in Italy everybody does the "I'll charge you X less without VAT" (which is 23% in Italy, I should point out), so this is also fighting that.
They just want to track what you spend your money on, that's step one. Step two is to restrict what you can spend your money on, although this is a partial side effect of part 1.
It's hard to say what happens with all of that.
Where do people get these ideas? How do they sincerely hold them?
No non-religious government wants to restrict what you can spend your money on. They want to get a cut of your money, but otherwise it's strictly better for them if you spend as much of it as possible.
If they don't want you to have things, they just attack those things directly, like hard drugs or weapons. No need to restrict your ability to purchase.
Let's ignore the fact that that was done by private companies and not directly by a government.
The mechanism is to make it so undesirable objects are not available for sale. The above comment is implying these things would remain legitimately for sale as normal, but you would be unable to spend money on them.
[0] (Romanian article) https://economedia.ro/parlamentarii-usr-au-depus-un-proiect-...
Seemingly the only effective way to solve this would be to ban purchasing highly resellable items with cash and requiring that cash to be deposited in to the system first.
I wonder if the "it's my money, I can withdraw it if I want" argument is good enough to send them on their way? (in addition to $1,000 being such a small amount as to be less-than-trivial when it comes to the overall problem of money laundering).