China Stablecoin Activity Explodes Despite Crypto Crackdown

Despite China's strict crypto regulations, stablecoin wallet activity in the country has surged dramatically. Chainalysis reports that peer-to-peer stablecoin use expanded sharply, with users relying more on self-custodied wallets for domestic transfers. From July 2025 to June 2026, China recorded $104.1 billion across 18.1 million self-custodied stablecoin transfers, marking a 43-fold increase in wallet activity since early 2024.

The data suggests that stablecoins are being treated as working capital, with holdings turning over 33.2 times per year, more than triple the global average. Peer-to-peer activity now accounts for 59.1% of China’s estimated $176 billion crypto economy, up from 3.5 times its share in the prior reporting period. This growth comes amid tightened restrictions, including February rules targeting unauthorized yuan-pegged stablecoins and tokenized real-world assets.

In contrast, other East Asian markets show divergent trends. South Korea’s crypto economy reached $449.1 billion, with 12.3% growth and strong retail interest in AI-linked tokens. Hong Kong stands out for institutional participation, with 16% of service inflows and nearly $24 billion in business-to-business flows. Japan has seen decentralized exchange activity rise over 200% since 2022, following July regulatory amendments that brought digital assets under its financial-markets framework.

The report highlights how China’s peer-to-peer-heavy market differs from its neighbors, underscoring the resilience of crypto activity despite regulatory challenges.