China’s P2P Stablecoin Wallets Boom Despite Crypto Crackdown

China’s peer-to-peer (P2P) stablecoin wallets surged 43-fold between the first quarter of 2024 and the second quarter of 2026, despite the country’s strict crypto regulations. This rapid growth was highlighted in a report by Chainalysis, which found that over 18.1 million transfers involving self-custodied stablecoins took place in China from July 2025 to June 2026, totaling $104.1 billion. The report also noted that stablecoin holdings in China turned over 33.2 times per year, significantly higher than the global average of 9.3, suggesting that users are leveraging stablecoins as working capital.

The data underscores China’s thriving crypto economy, estimated to be worth at least $176 billion. Domestic P2P activity accounted for 59.1% of this total, a sharp increase from its share in the previous reporting period. The largest monthly increase in domestic stablecoin transfer volume was recorded in March 2026, adding $4.9 billion. This growth occurred even as Chinese authorities reinforced restrictions on crypto trading in February, targeting unauthorized yuan-pegged stablecoins and tokenized real-world assets.

In contrast, neighboring East Asian markets are taking different approaches to crypto. South Korea, ranked as the region’s largest crypto economy at $449.1 billion, saw a 12.3% growth in activity, driven by retail traders’ interest in AI-linked tokens. Hong Kong stood out for its institutional activity, with institutional platforms accounting for 16% of service inflows, nearly three times the share in any regional neighbor. The city also issued its first stablecoin licenses in April. Meanwhile, Japan’s decentralized exchanges (DEXs) accounted for nearly 35% of service activity, with 65.7% of DEX swaps occurring between $10 and $1,000. Japan recently passed revisions to bring digital assets under its financial-markets framework.