U Card: Unable to Escape Short Lifecycle Without Support from Exchanges and Issuers
The current payment landscape is in a transitional phase before a qualitative change. Compared to the early stages, existing products have significantly improved in design details, usability experience, and compliance pathways, but there is still a considerable distance to building a complete and sustainable Web3 payment framework. Even so, this "yet-to-be-formed" state has become one of the focal points of market discussions over the past few months.
The U Card, as the latest form of the current crypto payment narrative, is essentially an "intermediate transitional mechanism"—it is neither a simple copy of traditional Web2 recharge cards nor the final form of a new generation of on-chain wallets or payment channels, but rather a product of compromise between current on-chain payment scenarios and off-chain consumption needs.
In practice, the U Card binds on-chain accounts with stablecoin balances and is supplemented by compliance-friendly off-chain consumption interfaces, achieving a composite model that lies between "Web2 familiar experience" and "Web3 asset logic." This model has rapidly gained attention in the past six months, partly because users' imagination of "on-chain assets being used for daily consumption" has never faded; on the other hand, it also indicates that stablecoins are attempting to move from traditional strong scenarios like cross-border remittances and OTC settlements further into C-end retail and local payment systems.
The U Card is the productized endpoint of this trend.
After enabling "crypto assets to be spent," the U Card has attracted considerable market attention. Bybit, Infini, Bitget, and others have successively launched related services, leading many to believe that "cryptocurrency payments are about to become widespread." However, the reality is that most projects have scaled back their operations after a brief period, especially those without the backing of exchanges or primary issuers, which have generally struggled to survive.
The operational model of the U Card is essentially highly dependent on the permissions of the traditional financial system, barely maintaining itself between compliance pressures and thin profits, making long-term sustainability difficult.
Strictly speaking, the "U Card" is not a commercially viable business model; it is merely one form of service that relies on external permissions.
Project teams need to rely on card organizations, issuing banks, and other layers of financial intermediaries to complete settlements, while they themselves are merely executors at the end of the chain.
A greater challenge lies in the fact that the operational costs of the U Card are extremely high, essentially making it a loss-making business. Project teams do not have the stable fee income of exchanges, nor do they possess the power of discourse like primary issuers, yet they must bear the service pressure from users.
The crux of the problem is that if project teams remain in the role of "intermediary's intermediary," they can only operate passively at the bottom of the licensing ecosystem. To change this situation, there are two paths: either join the account system, acting as an ecological connector for the crypto industry within the account system, gaining a voice in compliance mechanisms, and developing as part of the settlement system; or establish independence, waiting for the further refinement of the U.S. stablecoin legislation, bypassing the current cumbersome and inefficient settlement system, and tightly embracing the new opportunities brought by dollar stablecoins as the dollar's status declines.
For wallets and exchanges, the U Card serves more as an auxiliary function to enhance user stickiness rather than a primary source of profit. For exchanges like Bybit, even if the U Card business does not generate profit, it can lead to user growth and an increase in asset management scale. However, for Web3 startup teams lacking traffic entry points and experience in financial infrastructure, attempting to rely on subsidies and scale to create a sustainable U Card project is akin to a caged beast.
Is the next step for crypto payments underground money houses or on-chain "new" banks?
We can now draw a preliminary conclusion: what troubles crypto payments is the traditional financial settlement system. However, there are many opinions in the market about what crypto payments are—whether they are a complete imitation of daily life habits like scan-to-pay, or whether they seek new meanings in the anonymous network. For the latter, the significance of payment lies not in transfer, but in accumulation; thus, under this semantics, the essence of payment is not settlement, but circulation, which is an industry that has been growing wildly in the dark forest alongside the development of blockchain.
Taking the underground money houses of Chaoshan people and the Indo-Pakistani underground money houses as examples, they have built a digital ecosystem based on relationships, trust, and asset circulation. However, even if you want to become a "Chaoshan person," the habits of "Shandong people" may prevent you from fully adapting.
What is a Chaoshan-style digital money house? Its essence is trust; the flow of funds relies on "trust," the asset accumulation and circulation brought about by delayed settlement rely on "trust," and the "trust" generated by mutual understanding creates a risk of social death from a single betrayal. Chaoshan-style digital money houses require introductions from acquaintances to join, eliminating the possibility of strangers using them. There is an invisible joint liability mechanism between individuals: you not only need to ensure that the person you refer will not betray you, but also that the next person referred by your referrer will not betray you; otherwise, a single failure could uproot the entire network.
Under such a mechanism, payment is no longer a one-to-one relationship, but a one-to-many-to-one form that continuously circulates within such value networks.
Once funds flow in, it signifies entry—not just for payment, but to gain trust. When non-payment funds continuously flow in, they form accumulation; as more "Chaoshan people" gather in the money house, it transforms into a slow-settlement but high-frequency social payment network. The continuous circulation of value will bring substantial returns.
In fact, the "digital money house" style of closed ecological structure has been operating on-chain for many years; it has indeed solved some issues of gray fund circulation, but it has never managed to push "crypto payments" from niche markets to mainstream applications. On the contrary, what truly possesses global potential and is gradually approaching the user end is the on-chain settlement system built around dollar stablecoins, relying on compliance networks.
Let us return to a factual question: the underground money house-style on-chain structure has actually long existed. Whether it is the gray market arbitrage organizations in Southeast Asia or the Russian military conducting international settlements through USDT, digital assets have already developed sufficiently mature means to bypass traditional financial systems and achieve free capital circulation.
Especially with the rise of the Tron network, this logic is reflected. According to reports from on-chain security companies like TRM Labs and ChainArgos, between 2023 and 2024, over 40% of illegal on-chain fund flows occurred on the Tron network, with more than half completed through USDT.
These funds did not enter exchanges but completed operations similar to underground money houses' "mirror release" through OTC hedging, wallet "island hopping," and DEX diversion. This operational mode is highly similar to the overseas funding network constructed by Chaoshan people: it does not pursue final certainty at the settlement layer but relies on distributed trust chains and cross-border personal networks to ensure liquidity. But the question is, why has this on-chain "digital money house" been running for five years, yet we still have not seen its explosion in crypto payments? Does it still need to develop, or is its vibrancy inherently unrelated to you and me?
The fundamental reason is that such models are not designed for ordinary users; they do not solve the problem of "how to get more people to use cryptocurrency for payments," but rather "how to enable a few people to make untraceable payments using cryptocurrency."
Its starting point is to bypass, not to connect; it serves scenarios that do not wish to be covered by regulation, rather than user groups that need legal protection.
The financial network of Chaoshan people can build an efficient "family transfer system" between Thailand, the Philippines, and Hong Kong, but this does not mean that such a structure can be transformed into a globally scalable infrastructure. It resembles an efficient local area network, highly resilient in peripheral areas, yet difficult to connect with existing settlement systems in the global market.
From a systemic perspective, "funds unwilling to leave" can indeed increase a platform's TVL and improve capital utilization in the DeFi ecosystem, but from the perspective of a payment system, a truly scalable system requires funds to be able to freely "enter and exit," rather than "coming in but unable to go out."
The TON red envelope system and various on-chain points accounts are doing one thing: transforming the entry behavior of payments into accumulation. This is similar to the "Yu'ebao" logic of the Web2 era. This accumulation model does possess commercial value, but it cannot break ecological barriers. Users cannot freely use the assets in their TON wallets for cross-border payments, merchant payments, or POS machine collections, nor can they obtain a stable mapping with real-world account systems. "Chaoshan people" may not need mapping, but you cannot do the same thing in the U.S. using "Chaoshan dialect."
In other words, this "backyard circulation" model is not infrastructure but a self-reinforcing mechanism of the ecosystem. While it is indeed important to strengthen the use scenarios of funds in a closed system, it does not constitute the foundational logic of "payment" as a global service.
What truly drives Web3 payments from the "dark web" to the "mainnet" is the support of U.S. policy for stablecoin payment networks. In 2024, the U.S. Treasury officially promoted the GENIUS Act, and after Congress passed the Clarity for Payment Stablecoins Act, stablecoins were for the first time assigned the policy positioning of "strategic payment infrastructure."
Financial technology companies like Circle, Paxos, Stripe, Visa, and Mastercard are rapidly advancing the application expansion of dollar stablecoins in international settlements, merchant acquiring, and platform settlements. Data released by Visa at the beginning of 2024 indicates that over 30 global payment institutions are integrating USDC as a cross-border settlement asset; meanwhile, the issuance and use cases of USDC and PYUSD are also beginning to penetrate the retail end.
These are not mere circulations and accumulations in the virtual economy, but real flows of funds between goods and services, constituting settlement actions that are legally protected and compliant with audits. In contrast, token payments in the TON ecosystem and the "scan to pay" functions of certain wallets still belong to local functions within a closed system before truly entering corporate financial reporting systems, cross-border e-commerce platforms, and credit networks, rather than being global payment standards.
We cannot deny that the mechanism design of "digital money houses" is enlightening. Proposals like Intent and account abstraction are indeed upgrading traditional on-chain payments from "machine-to-machine" transfer actions to "human intention-driven" fund coordination. This resonates philosophically with the application of "strong trust in relationships" mechanisms in traditional underground money houses. However, a systematic payment structure cannot be built solely on vague social trust and localized circulation logic; it must ultimately connect to regulation, making user identities, transaction processes, and sources of funds traceable.
At the same time, we must also view the development direction of crypto payments from a more macro perspective: as the global monetary status of the dollar faces structural challenges, the U.S. fiscal and monetary system is attempting to construct a new dual-track currency system of "dollar + dollar stablecoin." Whether it is to hedge against the expansion of RMB settlements, respond to the trend of emerging markets using euro/gold settlements, or stabilize its financial influence in regions like the Middle East and Southeast Asia, stablecoins are no longer marginal financial innovations but strategic tools actively deployed by the U.S. in international financial competition.
This is also why, in the past two years, we have seen a comprehensive acceleration in the promotion of dollar stablecoins, from congressional legislation to Treasury guidance, from traditional bank participation to the embedding of payment networks, deeply integrating into sovereign currencies and sovereign regulatory frameworks.
So the question arises: can a digital money house-style payment model support such a strategic system? Clearly, it cannot. The essence of the underground money house model lies in evading regulation, while what the U.S. aims to build is a globally embedded financial network with regulation; digital money houses rely on community trust and arbitrage in gray areas, whereas the dollar stablecoin system must be built on compliant financial institutions and regulatory permission chains.
It is hard to imagine that the U.S. Treasury would entrust a key payment infrastructure to a funding network that relies on non-KYC wallets, anonymous bridging, and OTC trading. Digital money houses can solve circulation issues in marginal areas but cannot constitute a sovereign national-level currency governance structure. Stablecoins are being assigned this role.
In other words, the future of the crypto industry will not be one that coexists with the gray industry; it played a supporting role in the dark side before the crypto industry matured, but the approval of Bitcoin ETFs has ushered the crypto industry into a new cycle, one that is fully integrated and interwoven with traditional finance.
Whether it is JPMorgan launching JPM Coin, BlackRock deploying the BUIDL fund, Visa integrating USDC, Stripe connecting to on-chain payments, or Circle engaging in policy alignment with central banks around the world, these initiatives indicate that traditional finance is accelerating its entry into the on-chain world, and their standards are clear—compliance, transparency, and regulatory oversight. This set of standards inherently rejects the expansion of underground money house logic, thus constituting the fundamental limitations of the "digital money house" model as the main pathway for crypto payments.
The true future of Web3 payments lies in a network built on dollar stablecoins and compliant settlement channels. It can embrace decentralization and openness while leveraging the credit foundation of the existing fiat currency system. It allows funds to flow freely in and out, but does not blindly trust accumulation; it emphasizes identity abstraction but does not evade regulation; it integrates user intent but does not stray from legal boundaries. In this system, funds can not only enter the Web3 world but also leave freely; they serve not only financial activities on-chain but are also embedded in global goods and services exchanges.
Digital money houses are like water, formless and flowing with the current; a drop of rain falls into it and becomes the sea. The next stage of crypto payments should resemble light, capable of merging with one another while having its own origin, tracing back to find the path it came from, not seeking to consume but focusing on illumination.
About Movemaker
Movemaker is the first official community organization authorized by the Aptos Foundation and jointly initiated by Ankaa and BlockBooster, focusing on promoting the construction and development of the Aptos ecosystem in the Chinese-speaking region. As the official representative of Aptos in the Chinese-speaking area, Movemaker is committed to building a diverse, open, and prosperous Aptos ecosystem by connecting developers, users, capital, and numerous ecological partners.
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