U Card Project Entrepreneurship: Hong Kong May Be the Best Choice

In recent years, the U Card project has garnered widespread attention in the cryptocurrency finance sector. This product allows users to convert stablecoins such as USDT or USDC into fiat currency and spend, pay, or withdraw through physical or virtual cards. For entrepreneurs looking to enter this field, choosing the right starting point is crucial.

After in-depth analysis, Hong Kong seems to be an ideal place to launch the U Card project. This is not because Hong Kong has the most relaxed regulations, but because it offers a viable, stable, and resource-rich environment.

The advantages of Hong Kong are mainly reflected in the following aspects:

1. Clear regulatory framework: Currency exchange services require a license for currency service operators (MSO), while stored value functions fall under the supervision of stored value payment instruments (SVF). Currently, stablecoin custody does not require an additional license.

2. Improved infrastructure: There are abundant card issuing institutions (BIN) partners, MSO service providers, KYC service providers, and payment clearing network resources in the area.

3. Flexible operational space: Through clever structural design, such as the combination of instant authorization and custodial wallets, projects can gain a certain degree of developmental space in the regulatory gray area.

To successfully operate the U Card project in Hong Kong, entrepreneurs need to prepare the following key elements:

1. Stablecoin custodian (e.g., Fireblocks)
2. Issuing Institution ( BIN ) Partner
3. MSO license holders or service providers
4. Payment Clearing Network
5. KYC Service Provider

In terms of licensing, although the SVF license is theoretically necessary, in practice most U-card projects choose not to apply for it. This is because the threshold for the SVF license is extremely high, requiring a paid-up capital of 25 million HKD, along with strict technical reviews and risk control requirements. In contrast, these projects typically emphasize that they are "non-stored value tools" and use the MSO license to legitimize their fund exchange functions.

Regulatory agencies are currently taking a wait-and-see approach to this practice, possibly because these projects are relatively small and do not yet pose a threat to financial stability. However, once the user base grows significantly, the regulatory attitude may change.

Although from a legal perspective, the MSO license is not mandatory if it does not involve fiat currency exchange or cross-border remittances. However, in practical operations, banks, clearing institutions, and payment parties usually require project parties to provide an MSO license. Therefore, the MSO license is "indispensable" in reality.

During the process of exchanging stablecoins for fiat currency, most projects choose to collaborate with local over-the-counter ( OTC ) service providers, rather than going directly through cryptocurrency exchanges or other large institutions. This method is more flexible, has a faster settlement speed, and can bypass the scrutiny of exchanges.

In addition to Hong Kong, places like Singapore, Malaysia, and Dubai also offer lower threshold options for the U Card project. However, considering various factors comprehensively, Hong Kong remains the ideal choice with the most practical implementation, high bank acceptance, and relatively relaxed regulation.

For entrepreneurs preparing to launch the U Card project, seeking professional legal and compliance support is crucial. This includes not only structural design and regulatory interpretation but also the drafting and customization of core compliance documents, as well as support for coordination and negotiation with various partners.

The U Card project represents an important step for crypto assets to advance towards real payment scenarios. Through clear structural design and robust operational pathways, entrepreneurs can genuinely integrate crypto payments into daily life on a compliant basis, rather than remaining on the fringes of regulation.