Brad Sherman Opposes US Government Stablecoin Payments, Citing Tax Evasion Risk

Rep. Brad Sherman, one of Congress’s most prominent cryptocurrency critics, has strongly opposed proposals for the US government to make payments in stablecoins. The debate over the use of stablecoins in the public sector is widening.

Decrypt reported on June 5 that Sherman criticized the idea of the federal government using stablecoins to distribute tax refunds or disaster relief payments.

"The moment the government pays citizens in stablecoins, it is effectively giving official approval to a covert tool meant to replace the dollar," he said.

Stablecoins are "an alternative designed in essence to facilitate a tax-evasion economy," he added.

Sherman also said some large law firms are exploring ways to bypass rules tied to paying interest on stablecoins. He called for close regulatory oversight and broader rule changes.

The US has recently been debating whether to introduce a government payment system that uses stablecoins. Supporters cite payment efficiency and improved financial access, while opponents have raised concerns about anti-money laundering compliance, tax avoidance and financial stability.

Market participants expect the political debate over stablecoin regulation and the scope of its use to influence future legislation and policy.