USDC surpasses USDT in on-chain activity, amid anti-gun policy reversal
Circle, the US stablecoin issuer, has reversed its previous policy banning firearm-related purchases with USDC by updating its terms to allow lawful purchases. This change follows pressure from pro-gun groups like ATR and NSSF, earning praise from Republican leaders and the gun lobby for protecting constitutional rights and opposing financial discrimination. Republican Senator Bill Hagerty and pro-crypto Senator Cynthia Lummis highlighted the move as a win for lawful gun owners and businesses. Additionally, Circle’s USDC stablecoin is experiencing significant growth, surpassing Tether (USDT) in blockchain activity and market capitalization due to regulatory compliance, transparency, and institutional adoption. This trend aligns with the broader market shift toward trustworthy and regulated stablecoins.
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Circle Updates Terms to Allow Firearm Purchases with USDC
Circle, the US’s stablecoin issuer, updated its terms of service to permit lawful firearm purchases with USDC. This marks a reversal of its previous policy, which had banned such transactions until this month. Previously, Circle had prohibited the purchase of “weapons of any kind, including but not limited to firearms, ammunition, knives, explosives, or related accessories,” categorizing them as restricted.
Advocacy Groups Influence Policy Change
Groups like Americans for Tax Reform (ATR) and the National Shooting Sports Foundation (NSSF), both conservative and proponents of gun rights, advocated for the change. As a result, Circle’s terms now specify that only weapons purchased in violation of applicable laws are prohibited. This move has received praise from Republican lawmakers and gun lobbyists.
Republican Praise for Circle's Decision
The NSSF expressed gratitude for Circle’s clear stance, stating that it appreciates the company’s quick reversal and its non-discrimination against lawful firearm commerce. Republican senators hailed the change, framing it as a win against financial discrimination.
Senator Bill Hagerty (R-TN), author of the recently passed GENIUS Act, commented: “This is a reversal of Choke Point-inspired mechanisms to bypass the legislative process and covertly push liberal partisan goals. America will no longer stand for this weaponization of our financial system.”
Circle's Stance on Constitutional Rights
Pro-crypto Senator Cynthia Lummis said that Circle is safeguarding constitutional rights by ensuring banking systems cannot be misused against law-abiding gun owners and legal businesses. She praised the alignment of Circle’s terms of service with existing laws rather than imposing additional restrictions. Lummis stated, “Circle’s decision to allow legal purchases of firearms using its stablecoin takes a powerful stand against discrimination targeting lawful gun owners.”
Impact of the GENIUS Act and Stablecoin Growth
The passage of the GENIUS Act has boosted the role of private stablecoins in the US financial system. With the total market cap exceeding $300 billion, major Wall Street firms are working on launching their own tokens. As stablecoins grow more popular, conservative and pro-gun groups—and other previously discriminated sectors like cannabis and gambling—are monitoring similar policies that might limit their use.
USDC's Growth Surpasses USDT
JPMorgan analysts highlighted that USDC has overtaken USDT in terms of blockchain activity and market capitalization growth. They attributed this to USDC’s compliance with regulations and growing institutional adoption. The market capitalization of USDC has grown 72%—from approximately $43 billion in January to $75 billion—compared to USDT’s 32% growth in the same timeframe.
USDC Prioritized for Transparency and Compliance
Analysts noted that USDC’s transparent reserve management and regular audits increase its trustworthiness among institutional investors. Compliance with regulatory frameworks like the Markets in Crypto-Assets (MiCA) regulation in Europe further sets USDC apart from competitors. The MiCA framework has widened the gap in stablecoin activity between USDC and USDT.
USDT, lacking MiCA authorization, has faced delistings from major exchanges, while USDC benefits from integrations with Visa, Mastercard, Stripe, and others, enabling on-chain settlements and merchant payments.