So much of the energy surrounding the digital currency space has been aimed at bringing forth a new liberty. In a world where governments and some financial institutions, often at the government’s prodding, seek to curtail lawful transactions they disfavor, digital currency, which in many circumstances is transacted outside the legacy financial system, becomes attractive.
It’s why many freedom-minded folks flock to cryptocurrency like Bitcoin. Bitcoin is a digital, portable, property rights ledger that isn’t dependent on any government for its existence or acceptance. It is uncensorable, meaning anyone anywhere can transact with Bitcoin without the approval of a third party. Some call it the equivalent of digital gold.
Therefore, it’s unfortunate that some in the digital currency industry are implementing the type of restrictions seen in parts of the legacy financial regime.
On October 24, Americans for Tax Reform (ATR) published a troubling item titled, “You can’t buy a gun with Dem donor’s stablecoin.” The piece concerned Circle Internet Group’s US Dollar Coin (USDC), a digital currency structured to hold the value of $1. ATR cited USDC’s terms, which include,
21. Prohibited Transactions
Using USDC or the USDC Services for transactions related to the following is prohibited, and Circle reserves the right to monitor and, if appropriate, block or otherwise prevent transactions that relate to:
…
2. weapons of any kind, including but not limited to firearms, ammunition, knives, explosives, or related accessories;
ATR went on to explain that Circle Internet Group CEO Jeremy Allaire “is an avid donor to Democrats according to his [Federal Election Commission] profile.” The tax group also wisely noted that this episode illustrates the dangers of government-controlled central bank digital currency. Understanding this problem, President Donald Trump prohibited the federal government from pursuing a central bank digital currency in his January 23 “Strengthening American Leadership in Digital Financial Technology” executive order.
Gun owners and the gun industry are all too familiar with being targeted under the legacy financial system.
The Obama Administration introduced “Operation Choke Point,” a program to weaponize the banking industry and financial service providers against certain lawful businesses and merchants. Implemented by Eric Holder’s Department of Justice and the Federal Deposit Insurance Corporation (FDIC), the ostensible objective was to fight consumer fraud by cutting off access to credit and bank services for businesses classified as “high risk” (e.g., online gambling sites, escort services, payday loan operations, and those that had a higher incidence of consumer complaints, returns, or chargebacks).
However, the list also included federally licensed firearm and ammunition dealers, already among the most heavily regulated businesses in America.
President Trump ended Operation Choke Point in 2017.
In 2022, the International Organization for Standardization (ISO) approved a Merchant Category Code (MCC) for firearm retailers. The ISO is a European non-governmental organization that is used to standardize commercial practices across the globe. MCCs are used by payment processors (like Visa and Mastercard) and other financial services companies to categorize transactions. The change was prompted by requests from Amalgamated Bank, a notoriously anti-gun financial institution.
Backers of the firearm retailer MCC made clear that their goal was to use the code to enact further gun control through a public-private partnership. Amalgamated Bank noted that they intend to create a software algorithm that will use the MCC “to report suspicious activity and illegal gun sales to authorities.” The contours of what would be deemed “suspicious activity” have not been articulated. As those purchasing firearms from retail establishments already undergo an FBI National Instant Criminal Background Check System (NICS) check, such “suspicious activity” would be aimed at otherwise lawful gun sales.
Gun owners and the firearms industry were quick to mobilize in opposition to the firearm retailer MCC scheme, and now 20 states have laws prohibiting the effort.
In a September 2024 World Economic Forum podcast, Allaire stated that an “exciting thing over, say, a five-year period” would be “that essentially storing and moving money, making and receiving a payment will essentially become instant, global, frictionless and free.” One would hope that this would include making and receiving payments for all lawful products, but especially those protected by the U.S. Constitution.
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