**Rise of “U Cards” and Cross-Border Payment Trends in China and Beyond**
Locally referred to as “U cards,” overseas Visa or Mastercards linked to stablecoin balances such as USDT have gained significant popularity on Chinese social platform Xiaohongshu, also known as Little Red Book. Users share posts explaining how to easily obtain these cards and use them for everyday overseas transactions, including subscriptions to various services.
These cards enable users to spend dollar-denominated stablecoins while merchants receive fiat currency. This setup means Chinese businesses never directly handle cryptocurrencies. The conversion process is managed by overseas banks or licensed payment institutions, effectively placing these transactions outside China’s domestic financial infrastructure.
This trend recently attracted attention from Caixin, one of China’s most influential finance outlets. Caixin examined the rise of U cards and the legal questions surrounding their use. According to their report, many users initially view U cards as a workaround for cross-border payments rather than as a direct crypto product. Social media tutorials often focus on opening a foreign bank account and linking it to Apple Pay or Visa networks, with minimal emphasis on the digital assets involved.
It’s important to note that direct cryptocurrency payments are prohibited in China, as are activities such as crypto trading and mining. Liu Honglin, founder of Shanghai Mankun Law Firm, stated on X (formerly Twitter) that consumers making payments through U cards face relatively limited exposure to cryptocurrencies since asset conversions take place offshore, and settlements remain within traditional card networks.
In a related context, U.S. policies also reflect the evolving landscape of stablecoins and digital currencies. In July, then-President Donald Trump signed legislation guiding the development and regulation of U.S. stablecoins, which now account for transactions across nearly 250 million personal and corporate wallets, according to the PBOC’s figures. Lu, a key financial figure, framed the digital yuan’s transition as a response to emerging currencies outside the traditional financial system, including cryptocurrencies and stablecoins. He dismissed the notion that blockchain-only systems qualify as true digital currencies.
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**South Korea’s Financial Giants Move Closer to Crypto Exchanges Amid Regulatory Preparations**
South Korea’s major financial groups are actively positioning themselves within the country’s cryptocurrency exchange industry ahead of new regulations expected next year. Notably, Mirae Asset Group has reportedly sought to acquire a controlling stake in Korbit, the country’s fourth-largest exchange by trading volume, through its non-financial affiliate, Mirae Asset Consulting.
South Korea maintains strict separation between finance and industry; regulated financial institutions are prohibited from owning non-financial businesses. Even licensed crypto exchanges are still classified as non-financial entities. Given this, if Mirae Asset had pursued the acquisition through its securities or asset management arms, regulatory approval would likely have been delayed or blocked.
To navigate these restrictions, other financial firms have adopted more flexible arrangements. For instance, on Friday, Korea Investment & Securities, one of the top firms by assets, signed a cooperation agreement with Bithumb—the country’s second-largest exchange—to develop asset management services aimed at high-net-worth clients.
Furthermore, Upbit, South Korea’s dominant exchange often criticized for monopoly practices, is attracting traditional financial backing. Naver Financial, the fintech subsidiary of the internet giant Naver, plans to acquire Upbit operator Dunamu in a stock-swap deal valued at approximately $10.3 billion.
Despite the lack of a comprehensive regulatory framework, South Korea’s financial sector is racing into crypto. The country is preparing to unveil detailed regulations by January 2026, aiming to foster growth while addressing risks.
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**Legal Challenges: Former Coinbase Customer Service Agent Arrested**
In a significant development, a former Coinbase customer service agent linked to a major data breach earlier this year has been arrested in India, according to Coinbase CEO Brian Armstrong. He also indicated that additional arrests are anticipated.
The US-based cryptocurrency exchange faced intense scrutiny after revelations that illicit actors had paid overseas customer service contractors starting in December 2024. These actors gained access to the personal information of approximately 70,000 Coinbase users.
In May 2025, Coinbase disclosed that the attackers had obtained sensitive identity data, including government-issued photo IDs and home addresses. The breach raised concerns, especially as Coinbase had updated its user agreement shortly before publicly acknowledging the incident.
Critics argued that Coinbase’s introduction of an arbitration clause—which could limit class-action lawsuits—was problematic. However, the company maintained that this clause had been part of their terms of service for some time.
Legal experts noted that such arbitration clauses are generally enforceable in the US, where user agreements often hold legal weight. Nonetheless, these provisions may have less influence in other jurisdictions, raising questions about the global enforceability of such terms.
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*Stay tuned for more updates on digital currencies, fintech innovations, and regulatory developments worldwide.*
https://bitcoinethereumnews.com/crypto/chinese-users-turn-to-u-cards-to-get-around-crypto-rules-asia-express/
