U Card Project in Hong Kong: The Best Choice for Web3 Payment Startups

In recent years, the U Card project, which allows the conversion of USDT/USDC into fiat currency and usage through physical or virtual cards, has attracted much attention. For entrepreneurs looking to start a U Card project from scratch, Hong Kong may be the ideal starting point.

The reasons why Hong Kong has become the preferred choice are as follows:

1. Clear regulatory boundaries: Currency exchange requires an MSO license, stored value is managed by SVF, and currently, there is no additional license required for stablecoin custody.
2. Convenient management of crypto assets: can be completed through a custodian without the need to apply for additional licenses.
3. Abundant cooperation resources: There are numerous local BIN partners, MSO service providers, KYC providers, and payment clearing networks.
4. Flexible operating space: Through clever structural design, the project can find development opportunities within the regulatory gray area.

To establish a compliant U-card project in Hong Kong, at least the following five types of core partners are needed:

1. Custodial wallet provider
2. BIN Sponsors (Card Issuers)
3. MSO license holders
4. Payment Settlement Network
5. KYC service provider

Regarding the licensing issue, although the SVF license is not legally required, the MSO license is indispensable in practical operations. Without the MSO license, banks may not provide deposit accounts, clearing institutions may refuse to accept fiat currency, and even investors may question the compliance of the project.

In the U Card project, the exchange of stablecoins to fiat currency is usually completed through local OTC service providers. This method has advantages such as flexibility, fast arrival, and avoiding exchange scrutiny.

Apart from Hong Kong, places like Singapore, Malaysia, and Lithuania are also options to consider. However, taking into account various factors, Hong Kong remains the most suitable place for the U Card project to start.

For entrepreneurs preparing the U Card project, professional legal support is essential. An excellent Web3 legal team can provide comprehensive compliance support, including structural design and regulatory interpretation, drafting of core compliance documents, as well as assistance in landing and negotiation support services.

The U Card project represents an important step in the advancement of crypto assets into real-world payment scenarios. With a clear structural design and a robust development path, we have the opportunity to truly integrate crypto payments into daily life, rather than just being a product in a regulatory gray area.