China's Crypto Ban Fuels 43x Surge in P2P Transactions

Chinese Crypto Activity Surges Despite Strict Bans, Stablecoins Lead the Way

Despite China’s stringent cryptocurrency ban, peer-to-peer (P2P) transactions among Chinese users have surged by 3.5 times in the past year, according to a recent study. This trend highlights a growing reliance on informal channels to circumvent the nation’s heavily restricted centralized crypto operations.

Blockchain intelligence firm Chainalysis reports that Chinese individuals and entities have moved over $176 billion in crypto transactions in the last two years. A significant driver of this volume has been a remarkable 43-fold increase in stablecoin turnover between the first quarter of 2024 and the second quarter of 2026. These transactions have largely occurred on underground and over-the-counter platforms.

The growth in smaller transactions has been particularly dramatic. Since March 2025, transactions under $100 have increased by 996%, while those between $100 and $1,000 have grown by 1,057%, and transactions ranging from $1,000 to $10,000 have seen a 1,321% rise.

During the same period, analysts recorded 18.1 million P2P stablecoin transactions, totaling $104.1 billion. China’s annual stablecoin turnover reached 33.2 times, a substantial figure when compared to the global average of 9.3 times.

These statistics suggest that China is primarily using stablecoins as a medium of payment rather than for long-term savings. The adoption of stablecoins has also been influenced by the 2025 expansion of the social credit system, which monitors the trustworthiness of individuals and entities. Stablecoins offer a way to bypass this government oversight, in addition to existing crypto restrictions.

Mining Operations Continue Abroad

Even though cryptocurrency mining remains illegal within China, entities linked to the country still contribute an estimated 15% of the global Bitcoin hashrate. These mining operations are predominantly located outside of China’s jurisdiction, with hubs established in regions such as Africa, Central Asia, and Latin America.

In contrast to countries like Japan, Hong Kong, Singapore, and South Korea, which are focusing on crypto regulation, China’s crypto activity is largely centered on stablecoins. Chinese regulators have recently moved to prohibit unauthorized individuals and companies from issuing a digital yuan.