Will getting a digital bank account let my government track my online activity?
For context; I live in a NOT progressive country/region where being LGBT is illegal, and I often post in LGBT spaces. I want to do digital transactions but am afraid of the above will quickly get me in jail.
Yes. If your country is authoritarian use cryptocurrency such as Monero. Even Bitcoin can be much better.
The bank would know the amount, the merchant and other details even if it's a merchant from abroad. The bank might have a duty to report certain transactions or could be forced to give out a record. Other international payment process or foreign banks will generally not refuse a request if it comes from a country government you are a citizen of.
You can use crypto to buy gift cards to shop at regular retailers. This is your safest bet if you're concerned about a state surveillance of your transactions.