USDC Outpaces USDT in On-Chain Activity Amid Policy Shift on Firearms Transactions

• Why Did Circle Reverse Its Firearms Transaction Policy?
• How Are Republicans and the Crypto Industry Reacting?
• USDC vs. USDT: Who’s Winning the Stablecoin Race?
• What’s Next for Stablecoins and Controversial Industries?
• FAQs

Circle, the issuer of USDC, has updated its terms to permit legal firearm purchases using its stablecoin—a reversal from its previous ban. This move, praised by conservative groups and Republican lawmakers, coincides with USDC’s rapid growth in blockchain activity and market capitalization, now surpassing Tether (USDT). JPMorgan analysts attribute this to USDC’s regulatory clarity and institutional adoption. Meanwhile, USDT faces challenges under Europe’s MiCA framework. Here’s a deep dive into the implications.

Why Did Circle Reverse Its Firearms Transaction Policy?

Circle’s updated terms now allow USDC for legal firearm purchases, scrapping a prior ban that prohibited transactions for weapons, ammunition, and related accessories. The shift followed pressure from pro-gun groups like Americans for Tax Reform (ATR) and the National Shooting Sports Foundation (NSSF). The new policy restricts only illegal purchases, aligning with existing laws. NSSF applauded Circle’s “swift, unambiguous” stance, while Senator Cynthia Lummis framed it as a win against financial discrimination. The move mirrors broader conservative efforts to counter “Operation Choke Point”-style policies, which targeted industries like firearms and cannabis.

How Are Republicans and the Crypto Industry Reacting?

Republican lawmakers, including Senator Bill Hagerty (author of the GENIUS Act), hailed the change as a blow to ideological financial exclusion. The GENIUS Act has bolstered private stablecoins’ role in U.S. finance, with the sector’s market cap exceeding $300 billion. Lummis emphasized that Circle’s compliance with constitutional rights sets a precedent against “weaponizing banking systems.” Meanwhile, crypto-friendly businesses—especially in firearms, cannabis, and gambling—are watching closely, as stablecoins become a lifeline for sectors historically marginalized by traditional finance.

USDC vs. USDT: Who’s Winning the Stablecoin Race?

JPMorgan’s latest report highlights USDC’s explosive growth: its market cap surged 72% since January 2025 (from $43B to $74B), dwarfing USDT’s 32% rise. Analysts, led by Nikolaos Panigirtzoglou, credit USDC’s transparency, regular audits, and MiCA compliance. Unlike USDT—delisted from major EU exchanges post-MiCA—USDC gained traction through integrations with Visa, Mastercard, and Stripe. “Institutional trust hinges on regulatory adherence,” noted the BTCC team. “USDC’s reserves management and MiCA alignment make it the go-to for regulated entities.”

What’s Next for Stablecoins and Controversial Industries?

As stablecoins like USDC penetrate mainstream finance, their role in enabling transactions for politically sensitive sectors grows. Circle’s policy shift signals a broader trend: crypto as a workaround for industries facing banking restrictions. However, regulatory scrutiny looms. “The MiCA effect is real,” said a BTCC analyst. “Projects without clear compliance frameworks risk getting left behind.” With Wall Street giants eyeing stablecoin issuance, the battle for dominance—and the politics surrounding it—is far from over.

FAQs

What changed in Circle’s firearms transaction policy?

Circle now permits USDC for legal firearm purchases, reversing a ban that previously restricted such transactions.

Why is USDC growing faster than USDT?

USDC’s growth (72% vs. USDT’s 32%) stems from MiCA compliance, institutional adoption, and partnerships with payment networks like Visa.

How does MiCA impact stablecoins?

MiCA requires stablecoins to meet transparency and reserve standards. USDC’s compliance contrasts with USDT, which was delisted in the EU.