Cryptocurrency firm Circle has reversed its policy prohibiting the use of its USD Coin (USDC) stablecoin for legal firearms purchases, a move celebrated by conservative groups and gun rights advocates who argue against financial discrimination.
The company’s updated terms of service now permit USDC to be used for transactions involving weapons, as long as these purchases comply with existing law. This overturns a previous ban that explicitly covered “weapons of any type, including firearms, ammunition, knives, explosives or similar accessories.”
The policy shift followed significant pressure from conservative organizations and proponents of gun rights.
Senator Bill Hagerty, a Republican from Tennessee, praised Circle’s decision, calling it a reversal of “mechanisms inspired by Operation Choke Point” that he said attempted to achieve “partisan liberal goals without legislative approval.” He emphasized that the United States would no longer tolerate the “politicization of the financial system.”
Senator Cynthia Lummis, a vocal supporter of the cryptocurrency sector, also applauded the change. She stated that Circle is “protecting constitutional rights” by preventing the banking system from being used against law-abiding citizens and legitimate businesses.
Lummis noted that the new terms align with existing legislation, rather than imposing additional restrictions. She described the decision as “a strong stance against discrimination targeting legal gun owners.”
Organizations such as Americans for Tax Reform and the National Shooting Sports Foundation expressed their appreciation for Circle’s “rapid change of posture” and its commitment against discriminating in legal arms trade.
The term “chokepoint” refers to practices where financial institutions restrict access for certain legal businesses based on ideological motivations.
This development occurs amidst the rising prominence of private stablecoins in the U.S. financial system, partly fueled by the recently approved GENIUS Act, authored by Senator Hagerty. The total market value of stablecoins now surpasses $300 billion, with several Wall Street firms preparing to launch their own tokens.
Businesses in sectors traditionally marginalized by traditional finance, including firearms, cannabis, and online gambling, are closely observing how stablecoin policies evolve regarding potential restrictions.
A report from JPMorgan indicates that USDC’s growth is outpacing Tether’s USDT in both on-chain activity and market capitalization. Analysts attribute this momentum to a clearer regulatory framework and increasing institutional adoption.
USDC’s market capitalization expanded by 72% this year, rising from approximately $43 billion in January to $75 billion. In contrast, USDT grew by 32% during the same period.
The JPMorgan study, led by managing director Nikolaos Panigirtzoglou, highlighted USDC’s “transparent reserves and regular audits” as factors making it more reliable for institutional investors and regulated entities. Its compliance with regulations like Europe’s MiCA law further differentiates it from competitors.
Analysts also pointed out that MiCA’s implementation widened the gap between the two assets, as USDT faced exclusions from major European exchanges due to authorization issues. USDC, however, benefited from new integrations with Visa, Mastercard, and Stripe, which facilitate on-chain settlements and merchant payments.