Stablecoin Issuer Clarifies Terms of Service
Circle, the issuer of the USD Coin (USDC) stablecoin, has updated its terms of service to explicitly permit legal firearm purchases. This clarification addresses previously ambiguous language concerning weapons transactions, with the company now prohibiting only those weapons purchases that are "in contravention of applicable laws."
The previous terms appeared to block all firearms, ammunition, and explosives transactions without making a legal distinction. The updated language on Circle's website now suggests that users can purchase firearms with USDC in jurisdictions where such transactions are legally permitted.
Legislator Praises Policy Change
Wyoming Senator Cynthia Lummis praised the change on the social media platform X, formerly known as Twitter. She expressed her satisfaction that Circle now allows legal firearm purchases following discussions with the company. Senator Lummis stated that aligning terms with legal requirements is crucial for defending constitutional rights and preventing financial systems from being weaponized against law-abiding gun owners.
Context of Stablecoin Regulation
This policy update by Circle occurs amidst increased scrutiny and regulation of stablecoins, particularly under the current administration. In July, Republicans passed the GENIUS Act, which aims to regulate payment stablecoins. Circle CEO Jeremy Allaire and Tether CEO Paolo Ardoino were present at the signing ceremony for this legislation, which established a regulatory framework for payment stablecoins in the United States.
Uncertainty Surrounding Motivations
It remains unclear whether Circle's decision to update its policy was a direct response to feedback from lawmakers or an effort to strengthen ties with the current administration. The company had not issued any official comments on the policy change at the time of publication. Furthermore, it is uncertain how Circle might have enforced the previous restrictions, or if such restrictions had been in place since USDC's launch in 2018.