Potential Risks of U Card Promotion: Caution Required When Dealing with Mainland Users

In recent years, the U Card has become quite popular in the virtual currency space as a convenient way to spend without the need for traditional withdrawals. However, there are notable legal risks associated with promoting the U Card, especially when targeting users in mainland China.

The Essence of U Card

The U Card is essentially a USDT bank card. Its core principle is to utilize the price stability of stablecoins like USDT to provide users with a stable and convenient payment method. Users can recharge USDT into the card and use it in various offline consumption scenarios. Due to the relatively stable value of USDT, it is more suitable for everyday payments than more volatile cryptocurrencies like Bitcoin or Ethereum.

Policy Risks of Promoting U Card

Currently, some promoters are personally undertaking the card opening needs of mainland residents and even opening cards in bulk, which involves multiple risks:

1. According to relevant announcements and judicial rulings from the People's Bank of China and other departments, the mainland holds a negative attitude towards the exchange of cryptocurrencies with fiat currency. The use of U Card is likely to touch the bottom line of the foreign exchange management system. If promoters are found to be knowledgeable or indirectly supporting foreign exchange transactions, they may constitute an accomplice to "illegal business operations."

2. Promoters should carefully select the card issuing institutions. Currently, there are four main models for issuing U-cards: direct issuance by banks, issuance in cooperation with cryptocurrency companies, independent issuance by specialized crypto payment companies, and SaaS model collaborations. It is crucial to choose well-known and licensed service providers to ensure the safety of funds.

3. Promoters cannot assume that merely promoting or acting as an agent for card issuance does not constitute a crime. Collecting user information and assisting in card issuance may violate foreign laws, and they also bear the responsibility for personal information protection. More seriously, promoters actually undertake the review obligations of the card issuer; if they assist in using false information to issue cards or assist in issuing multiple cards to circumvent foreign exchange limits, they may be implicated in related crimes.

Conclusion

Although U cards and other stablecoin bank cards represent a trend in future payment methods, there are significant policy risks in promoting U cards to users in mainland China under the current environment. Even if the regulatory environment relaxes in the future, promoters should avoid directly participating in the card opening process to mitigate unnecessary legal risks.