Taking a cue from what the artist said, during the first quarter in Hong Kong, a friend gave me a U Card issued in Hong Kong. I won't mention the name, but the craftsmanship is quite good, and the accompanying app has some staking features. However, the biggest issue is that this type of card can be used for payments and ATM withdrawals.

What does this mean? This company is using an old scheme from around 2019, which means that depositing stablecoins will not directly convert to fiat currency. There needs to be an "exchange" process to convert stablecoins into Hong Kong dollars, and the interest rates are not very good. This is normal and is also the main profit-making method for the U Card.

But the most important thing is that reverse conversion is not allowed. In other words, if you convert 1,000 U into 7,400 Hong Kong dollars (I'm just giving an example), you cannot transfer the 7,400 Hong Kong dollars out, nor can you convert the 7,400 Hong Kong dollars back into U. The biggest problem here is the idle funds.

In the end, the usage rate of such a card may be very low. Even if you have a Hong Kong dollar account, you cannot move the money out. If there is any leftover from spending, it becomes idle funds, and idle funds can almost only be used for consumption.

So I still believe that the U Card scheme is not wrong, but this approach is probably flawed. If merchants cannot accept U for payments, it will ultimately be difficult to escape the problem of idle funds or tax issues.

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