Not quite, the central argument of the article was that incoming CBDCs are being designed to have no interest payable on them. The author was arguing that holding physical cash has the same shortcomings.
"Such concerns about financial stability are not to be dismissed. They have caused almost all CBDC designers — and all commercial banks — to conclude that it should pay no interest, since doing so would tend to add to the attraction, and increase the liquidity pressures on banks under duress. This design choice has largely gone unnoticed by the public. This is strange because paying no interest on CBDCs has large and lasting implications for citizens, even though they may not realise it."
That is true but you are talking about two different components.
The idea is that CBDCs have to be non interest bearing or else the capital will flow from commercial banks into the digital wallets. This would affect the banks ability to lend, causing economic stagnation from everything from business loans to mortgages.
Seigniorage is something different and not as applicable since the monetary system is much bigger than just the currency that people typically associate as money.
And most of it is in the private (read banking) sector.