That said, they do broadly track movements of physical currency. It’s one of, or was one of, their primary tools against counterfeiting, tracking large cash robberies, money laundering, etc.
They might not know “This bill was held by Person X and they spent it at Y which spent it at Z” but they do know “Person X had this bill, and it showed up again in region A. If more with associated numbers also show up in the area Person X is most likely there.”