What happened? Circle reversed its policy and now allows USDC to be used for lawful gun purchases.
Circle updated its terms after weeks of political pressure, removing a clause that had barred using USDC for weapons, including firearms and ammunition. The company now says USDC may be used for lawful purchases and only prohibits transactions that break applicable law. The change came after criticism from gun-rights groups, conservative advocates and Republican lawmakers who called the prior rule discriminatory.
Who does this affect? USDC users, firearm buyers and sellers, investors, and anyone worried about payment censorship.
Directly affected are gun owners and retailers who use crypto—those customers can now use USDC for lawful transactions without fear of being blocked. It also matters to Circle’s customers and public investors, since policy shifts at a major stablecoin issuer can influence trading activity and sentiment. More broadly, lawmakers, regulators and advocacy groups are watching because this decision touches on the risk of private firms policing legal commerce.
Why does this matter? It influences market trust, stablecoin flows, and Circle’s regulatory and investor outlook.
By reversing the ban, Circle reduces the immediate risk that users would flee USDC to competitors, which could stabilize or increase inflows and usage. At the same time, the episode highlights political and regulatory risks that investors will factor into Circle’s stock and stablecoin liquidity, possibly raising short-term volatility. The outcome also sets a precedent under the new GENIUS Act framework about how issuers write terms and how regulators and markets respond to perceived financial censorship.