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At least in the Netherlands, there are merchants that only accept cards and refuse cash, and they advertise it openly on their doors to make everyone aware. I suppose that they are "allowed".
I have heard also that in the US there are "cashless" businesses popping up. Also, try paying with cash at an airline check-in counter for extra luggage or whatever; they only accept cards.
I'm not sure about the law in the Netherlands, but I've seen this in Portugal too. As far as I know, it's illegal to refuse cash payments here.
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I think it’s illegal in USA but rules were relaxed when there was a penny and nickel shortage in 2021
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