USDC Overtakes USDT in On-Chain Activity Amid Policy Shift on Firearms Transactions
- Why Did Circle Reverse Its Firearms Policy?
- The Political Backlash Against "Operation Choke Point 2.0"
- USDC’s Market Dominance: By the Numbers
- What’s Next for Stablecoins?
- FAQs: USDC vs. USDT and Firearms Policy
Circle, the issuer of USDC, has updated its terms to allow legal firearm purchases using its stablecoin—a reversal from its previous anti-gun stance. This move, praised by pro-Second Amendment groups and Republican lawmakers, coincides with USDC’s rapid growth, now outpacing Tether (USDT) in on-chain activity and market capitalization. Analysts attribute this surge to regulatory clarity and institutional adoption, with USDC’s market cap jumping 72% year-to-date. Meanwhile, USDT faces headwinds under Europe’s MiCA regulations. Here’s the full breakdown.
Why Did Circle Reverse Its Firearms Policy?
Circle quietly updated its terms this month, removing a blanket ban on firearm-related transactions. Previously, USDC couldn’t be used for purchases of "firearms, ammunition, knives, explosives, or related accessories." Now, only transactions violating "applicable laws" are prohibited—a win for gun rights advocates like the National Shooting Sports Foundation (NSSF), which applauded Circle’s "unequivocal" support for legal commerce. Senator Cynthia Lummis (R-WY) framed the shift as safeguarding constitutional rights against "financial discrimination."
The Political Backlash Against "Operation Choke Point 2.0"
Republicans have long criticized what they call "woke banking" tactics—using financial restrictions to sidestep legislative debates. Senator Bill Hagerty (R-TN), author of the recently passed, hailed Circle’s policy change as a blow against "backdoor liberal agendas." The 2023 law shields lawful industries (including firearms and crypto) from arbitrary deplatforming. "The U.S. won’t tolerate weaponizing finance against lawful businesses," Hagerty told reporters. Critics, however, warn this could ease access to firearms amid rising gun violence.
USDC’s Market Dominance: By the Numbers
JPMorgan analysts note USDC’s market capsince January (from $43B to $75B), dwarfing USDT’s 32% growth. Key drivers:
- Regulatory edge: USDC complies with MiCA, while USDT faces delistings on EU exchanges.
- Institutional adoption: Visa, Mastercard, and Stripe now support USDC settlements.
- Transparency: Regular audits contrast with Tether’s opaque reserves.
"USDC is becoming thestablecoin for regulated entities," said BTCC analyst Mark Chen. Data fromshows USDC’s daily trading volume now rivals USDT’s on platforms like BTCC.
What’s Next for Stablecoins?
The firearms policy shift signals a broader trend: crypto as a haven for "politically marginalized" industries. Cannabis, gambling, and firearms businesses—often denied banking services—are flocking to stablecoins. Meanwhile, Wall Street giants like BlackRock are launching competing tokens. "The $300B stablecoin market is fragmenting between compliant and unregulated players," noted TradingView’s latest report.
FAQs: USDC vs. USDT and Firearms Policy
How does Circle’s policy change affect gun buyers?
Legal firearm purchases with USDC are now permitted, but sellers must still comply with local laws (e.g., background checks).
Why is USDC growing faster than USDT?
Clearer regulations, institutional partnerships, and MiCA compliance give USDC an edge in tradFi adoption.
Could USDT regain dominance?
Unlikely short-term—its lack of MiCA approval limits EU access, though emerging markets still favor USDT for liquidity.
