USDC stablecoin now allows gun purchases! Circle has amended its terms to permit legal firearm transactions.

Stablecoin issuer Circle has updated its USDC stablecoin policies to clarify rules regarding prohibited transactions, explicitly addressing the use of legally obtained guns and weapons. This week, cryptocurrency investigative reports highlighted that Circle revised its USDC terms, now explicitly stating that the platform “reserves the right to monitor and, where appropriate, block or otherwise prevent transactions related to the purchase of guns, ammunition, explosives, and other weapons.”

Key Details of Circle’s Policy Changes

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(Source: Circle)

The company updated its terms to prohibit “purchasing or selling weapons in violation of applicable laws,” indicating that legal transactions are possible. While this may seem like a minor wording change, it carries significant implications: the shift from a blanket ban to a conditional allowance hinges on the phrase “applicable laws.”

Crypto investigative reports this week pointed out that Circle’s updated USDC terms now explicitly state that “the platform reserves the right to monitor and, where appropriate, block or otherwise prevent transactions related to the purchase of guns, ammunition, explosives, and other weapons.” The critical phrase here is “where appropriate,” which suggests Circle retains discretion but does not outright ban all weapons-related transactions.

However, users have noted that Circle’s updated terms now include “violations of applicable laws” concerning weapons, implying that USDC can be used legally to purchase guns in certain jurisdictions. The actual impact depends on local laws. In the U.S., federal and state regulations differ—for example, in states like Texas and Wyoming with more relaxed gun laws, legal purchases are easier, whereas in California and New York, stricter licensing and background checks are required.

It remains unclear how the platform enforced such restrictions before the update or whether these restrictions have been in place since USDC’s launch in 2018. Cointelegraph reached out to a Circle representative for comment but had not received a response as of publication. This silence may reflect the sensitivity of the issue, with Circle possibly evaluating public reaction before issuing an official statement.

From a technical perspective, monitoring USDC for weapons purchases presents significant challenges. USDC is a blockchain-based token, and transactions are pseudonymous—addresses are public, but identities are not. How would Circle identify transactions related to weapons? This might require blacklisting known gun retailer addresses or relying on intelligence from on-chain analytics firms. However, peer-to-peer transactions or trades on decentralized exchanges would be difficult to track.

U.S. Political Context and the Second Amendment

Some U.S. lawmakers and gun rights advocates have praised Circle’s decision to defend Second Amendment rights—the constitutional right to “keep and bear arms.” Wyoming Senator Cynthia Lummis issued a statement on X (formerly Twitter) on Wednesday: “After discussions with Circle, I’m pleased they now allow the legal purchase of guns using their stablecoin. By aligning their terms with existing legal requirements, Circle upholds constitutional rights and ensures the financial system isn’t used against law-abiding gun owners.”

Lummis’s statement hints at possible political pressure behind the policy change. “After discussions with Circle” suggests direct involvement by legislators. Lummis, a Republican and a strong supporter of both cryptocurrency and gun rights, has pushed for crypto-friendly legislation and is a supporter of the NRA.

The phrase “ensuring the financial system isn’t used against law-abiding gun owners” points to broader political debates: should financial institutions refuse service based on political or moral grounds? In recent years, some banks and payment processors have refused service to gun manufacturers and retailers, sparking conservative backlash—often framed as “debanking” or “Operation Choke Point.”

From a constitutional perspective, the Second Amendment protects Americans’ right to own and carry firearms, but its scope remains hotly debated. Courts have clarified that individuals have the right to possess guns for lawful purposes like self-defense, but governments can impose restrictions on certain types of weapons, certain individuals (e.g., felons), and certain locations (e.g., schools).

Political Dimensions of Circle’s Policy Change

• Republican Pressure: Lawmakers like Lummis may have pushed Circle to avoid discrimination against legal gun transactions.
• Debanking Controversy: Responding to conservative concerns about politicized financial services.
• Second Amendment Defense: Positioning stablecoins as neutral financial tools that shouldn’t be subject to political censorship.

The Trump Administration’s Approach to Stablecoin Regulation

It’s unclear whether Circle’s move is a response to feedback from lawmakers and Second Amendment supporters or an effort to strengthen ties with former President Trump and the Republican Party. In July, Republicans passed the “GENIUS Act,” a comprehensive bill regulating payment stablecoins, with representatives from major stablecoin issuers like Circle’s Jeremy Allaire and Tether’s Paolo Ardoino attending the signing ceremony.

The Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act is the first comprehensive U.S. framework for stablecoin regulation, establishing licensing, reserve requirements, and consumer protections. Its passage signals a shift from cautious oversight to active regulation, aimed at fostering innovation rather than restricting growth.

Jeremy Allaire’s attendance at the signing indicates close ties between Circle and the Trump administration. During Trump’s presidency, the crypto industry gained unprecedented political support. Trump himself shifted from skepticism to support, promising to make the U.S. a “cryptocurrency capital.” This political environment has provided a more favorable landscape for stablecoin issuers like Circle.

The timing of Circle’s weapon purchase policy change is notable. Under a Trump-friendly, Republican-controlled Congress, Circle may see this as an opportunity to align policies with conservative values, avoiding legislative pressure and gaining favor with GOP lawmakers—potentially strengthening its position in future regulatory discussions.

However, there are risks. International markets, especially in Europe and Asia with stricter gun laws, might view USDC’s use for weapons purchases skeptically. Circle must balance domestic political considerations with maintaining its global reputation. Additionally, anti-gun-violence groups and Democratic lawmakers could criticize the move, arguing it facilitates easier and less traceable weapons transactions.

From a business perspective, this policy shift could open new markets. The U.S. gun industry is large—over $28 billion annually—and if USDC becomes a common payment method for firearms, transaction volume and market penetration could increase significantly. Yet, it also exposes Circle to legal and reputational risks associated with gun-related controversies.

Summary

Circle’s updated policies reflect a nuanced approach to weapons transactions, balancing legal compliance, political pressures, and business interests. The move underscores the complex interplay between cryptocurrency regulation, constitutional rights, and political influence in the U.S., highlighting how stablecoin policies can be shaped by broader societal debates.