Stablecoin issuer Circle has reversed its previous restriction on using USDC for firearm purchases, following weeks of criticism from conservative groups and gun rights advocates.

The change highlights the growing tension between digital payment platforms and constitutional rights in the United States, where financial intermediaries are increasingly pressured to define what counts as “lawful commerce.”

The update also underscores the delicate balance between regulatory compliance, political neutrality, and consumer freedom.

Crypto firms are facing greater scrutiny over how their platforms interact with constitutional protections like the Second Amendment in the evolving digital payments landscape.

On 5 November, Circle announced that it would amend a clause in its Prohibited Transactions policy, removing language that banned using USDC to purchase “weapons of any kind.”

The updated policy now allows lawful transactions involving firearms, stating that the company’s ban applies only to weapons purchases that violate applicable laws.

In a statement sent to the National Shooting Sports Foundation (NSSF), the company said it has “always held that the use of money should be free for lawful purposes,” including those protected under the Second Amendment.

The amendment brings Circle’s policy in line with constitutional guarantees that allow citizens “to keep and bear arms.”

The company confirmed that it will continue to prohibit USDC transactions linked to illegal or high-risk activities such as money laundering, unlicensed gambling, and fraudulent investment schemes.

However, the updated wording clarifies that firearm purchases are permissible if they comply with US laws.

Senator Cynthia Lummis publicly praised the decision, noting that Circle’s update “defends constitutional rights” while ensuring that financial systems are not “weaponised against law-abiding gun owners.”

After discussions w/ Circle, I’m glad they now allow legal firearm purchases using its stablecoin. By aligning its terms of service w/ existing legal requirements, Circle defends constitutional rights & ensures financial systems can’t be weaponized against law-abiding gun owners.

Her comments followed weeks of online criticism directed at the company from conservative organisations.

The backlash began in October when Americans for Tax Reform (ATR) flagged the original policy’s restrictive language.

ATR accused Circle of discriminating against gun owners, referencing political donations made by Circle CEO Jeremy Allaire to Democratic lawmakers, including Rep. Jake Auchincloss, a known supporter of gun control measures.

The NSSF also criticised the earlier clause, arguing that such policies undermine constitutionally protected commerce. After the reversal, the group commended Circle’s move, stating that “freedom can’t survive if your payment tools work against you.”

Circle reversed its discriminatory crypto policy after pressure from NSSF and others. Freedom can’t survive if your payment tools work against you. Read more: nssf.org/articles/crypt… #NSSF #FinancialFreedom #SecondAmendment

Under the new terms, Circle’s clause referring to “weapons of any kind” now includes a key qualifier: “in contravention of applicable laws.”

This amendment distinguishes between illegal arms trading and lawful retail sales, making Circle’s policy consistent with US financial regulations and industry standards.

Other restricted categories remain unchanged.

These include transactions with sanctioned individuals, participation in fraudulent or pyramid schemes, copyright infringement, unlicensed money transmission, or engagement in market manipulation such as insider trading and wash trading.

Circle also bans the use of USDC on darknet marketplaces or for purchasing counterfeit goods.

The company reiterated that it reserves the right to monitor or block transactions and may suspend or terminate accounts found in violation of its terms.

Circle’s move comes amid a wider debate on the role of payment firms in regulating moral or political behaviour through transaction bans.

As cryptocurrencies and stablecoins integrate further into mainstream commerce, issuers face increasing scrutiny over what constitutes a “lawful” use of digital money.

The controversy also reflects how financial infrastructure intersects with constitutional freedoms. By revising its terms, Circle aims to balance compliance with existing laws while addressing concerns of ideological bias.

The decision reinforces that blockchain-based money, while programmable, remains subject to the same legal and political debates that shape traditional finance.

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