I think it's great that Infini has stopped the U card business, although everyone trusts Brother Li's character and reputation. However, in the end, it still comes down to the product.

The U card itself is quite a false proposition.

The two biggest markets for U cards are the United States and China.

In the United States, cashing out is convenient, and the ACH cash-out rate for Coinbase's debit card is 0. Moreover, 99% of Americans prefer to use credit cards.

The cash-back rate on credit cards in the U.S. is over 1%. Because credit card processing fees in the U.S. are over 2%, most of that goes to the banks, so the banks give some of that money back to users and still make a profit to cover operational costs.

Banks can charge high interest by stimulating user spending. Essentially, it's still a type of lending business. So why would American users use the U card?

In China, cashing out can only be done via OTC, and the cash-out fee rate is between 0.5% and 1%, with risks of money laundering.

Meanwhile, the UnionPay POS in China has a rate of around 0.14%, so there is basically no cash-back, and the value of points is relatively low. However, there are still many discounts and promotions that can be taken advantage of. Therefore, domestic U cards have certain advantages.

The problem is compliance, as both payment channels and accepting Chinese KYC face various forms of resistance.

So the U card is not a good business.

It seems that OTC merchants are very primitive, but primitive methods can also create industries and empires. For example, why is the Huabei gold and jewelry industry globally leading?

Because every day, countless fifty-year-old uncles and aunts from Hong Kong pass through customs in Shenzhen, hiding a gold bar on them to hand over to a contact, which is then directly sent to Huabei for processing. Every gram of gold is about 5% cheaper, while gold bars from other regions using Shanghai Gold Exchange are more expensive, and Shenzhen Huabei crushes the national jewelry production and manufacturing companies with its cost advantage.

Yes, the fundamental pillar of a phenomenally successful jewelry industry cluster is those fifty-year-old uncles and aunties passing through customs every day.

The world is just a huge grassroots theater, FK it.