China's P2P Stablecoin Wallets Skyrocket 43x Amid Crypto Curbs

Despite China's strict cryptocurrency regulations, the use of stablecoins in peer-to-peer (P2P) transactions has surged dramatically. According to Chainalysis, the number of unique wallets sending P2P stablecoin transactions in China increased 43-fold from the first quarter of 2024 to the second quarter of 2026. The analysis estimates that China recorded $104.1 billion across 18.1 million transfers tied to stablecoins held in self-custody during the July 2025, June 2026 period. The rapid turnover rate of 33.2 times per year, more than three times the global average of 9.3, suggests that stablecoins are being used as 'working capital' rather than held for long-term investment.

The data highlights a significant growth in domestic P2P activity, which now accounts for 59.1% of China's crypto economy, estimated at $176 billion. This growth comes despite regulatory pressures, including new rules targeting unauthorized yuan-pegged stablecoins and tokenized real-world assets introduced in February. The largest monthly increase in domestic stablecoin transfer volume was recorded in March 2026, adding $4.9 billion.

Chainalysis also contrasts China's stablecoin usage with patterns in other East Asian markets. South Korea, with a $449.1 billion crypto economy, shows a preference for AI-linked tokens among retail traders. Hong Kong stands out for its institutional involvement, with 16% of service inflows coming from institutional platforms. Japan, meanwhile, has seen a rise in decentralized exchange (DEX) activity, accounting for nearly 35% of service activity, with 65.7% of DEX swaps occurring between $10 and $1,000.

The report raises questions about how enforcement will evolve, particularly in light of the February regulations. Observers will be watching whether domestic P2P dominance and stablecoin turnover remain elevated in the post-2026 enforcement environment.