Cryptocurrency Regulation Laws by CryptoWallet.com is licensed under CC BY 2.0.
Congress recently passed the GENIUS Act to provide certainty to banks that want to issue or accept stablecoins pegged to the US Dollar, but not all stablecoins can be used to purchase firearms.
The US Dollar Coin, or USDC, is issued by Circle Internet Group and carries a number of restrictions on how consumers can use their crypto. Their terms of use list 15 prohibited transactions, the second of which is a transaction involving “weapons of any kind, including but not limited to firearms, ammunition, knives, explosives, or related accessories”.
The remaining 14 prohibited transactions are either already illegal (money laundering or terrorist financing, for instance) or involve risks the issuer would be prudent to avoid like credit repair services or layaways and annuities.
Firearms are the only legal, constitutionally-protected property right that has nothing to do with any financial risk Circle will not allow you to buy with their coin. It is unclear whether the prohibition on knives includes a kitchen or butter knife, or what kinds of pocket knives might be prohibited as well.
This in itself is not proof of political bias, but the company’s CEO Jeremy Allaire is an avid donor to Democrats according to his FEC profile. The vast majority of his contributions have gone to Democrat state parties or Congressional candidates, especially Rep. Jake Auchincloss (D-MA), to whom he has donated more than $10,000. Auchincloss has introduced gun control legislation in the past.
This demonstrates the danger posed by a central bank digital currency, or CBDC. Circle is private company and can impose any terms and conditions it pleases, consistent with the law. But were the Federal Reserve to ever issue a CBDC, it could endanger the entire cryptocurrency market and impose significant restrictions on purchases.
Politically disfavored industries like firearms could easily be targeted by central bankers, just as they were by regulators in the Obama-Biden Operation Chokepoints. Ironically, crypto itself was targeted by regulators for debanking in the Biden administration’s Operation Chokepoint 2.0.
The House of Representatives passed Majority Whip Tom Emmer’s Anti-CBDC Surveillance State Act in July, taking a crucial first step in preventing the spread of Circle’s tactics to a government-issued stablecoin. The Senate should take up this bill and prevent social credit scores from infecting Americans’ financial decisions.
