China P2P Stablecoin Wallets Surge 43x Amidst Crypto Ban

China Sees Surge in Peer-to-Peer Stablecoin Transactions

The number of unique digital wallets facilitating peer-to-peer (P2P) stablecoin transactions in China experienced a dramatic 43-fold increase between the first quarter of 2024 and the second quarter of 2026, according to data from blockchain analytics firm Chainalysis. This surge indicates a significant shift in cryptocurrency activity towards direct wallet-to-wallet transfers within the country.

Record Holdings and High Turnover

During the 2026 reporting period, which spanned from July 2025 to June 2026, Chainalysis recorded $104.1 billion in stablecoin transactions across 18.1 million transfers involving China’s self-custodied holdings. The data also revealed that stablecoin holdings in China turned over an average of 33.2 times per year, a rate more than three times the global average of 9.3. Chainalysis suggests this high turnover is consistent with users treating stablecoins as a form of working capital.

Domestic P2P Dominance

Chainalysis’s latest report estimates China’s cryptocurrency economy to be worth at least $176 billion. Domestic P2P activity accounted for a substantial 59.1% of this total, a significant increase from its share in the 2025 reporting period. The report highlighted a $4.9 billion increase in China’s domestic stablecoin transfer volume in March 2026, marking the largest monthly rise observed.

Navigating Regulatory Landscape

This growth in P2P stablecoin transactions occurs despite China’s long-standing restrictions on cryptocurrency trading. Authorities reinforced these measures in February with new regulations targeting unauthorized yuan-pegged stablecoins and tokenized real-world assets.

Regional Contrasts in Crypto Activity

China’s P2P-centric market presents a stark contrast to South Korea, which Chainalysis identified as East Asia’s largest crypto economy with a valuation of $449.1 billion. Activity in South Korea grew by 12.3% from the previous period, with retail traders showing a notable preference for AI-linked tokens.

Meanwhile, Hong Kong distinguished itself with significant institutional activity. Chainalysis reported that institutional platforms accounted for 16% of service inflows in Hong Kong, nearly triple the share seen in any of its regional neighbors. The city attracted nearly $24 billion in inbound business-to-business flows. Hong Kong also issued its first stablecoin licenses in April.

In Japan, decentralized exchanges (DEXs) represented nearly 35% of service activity, the highest proportion among mature East Asian markets. Chainalysis noted that 65.7% of DEX swaps in Japan were valued between $10 and $1,000, and DEX activity has seen a rise of over 200% since 2022. Japanese lawmakers passed revisions in July that integrate digital assets into the country’s financial markets framework.