China’s P2P Stablecoin Wallets Surge 43x Amid Crypto Crackdown
Despite China's strict crypto regulations, the number of unique wallets engaged in peer-to-peer (P2P) stablecoin transactions in the country surged 43 times between Q1 2024 and Q2 2026. This rapid growth is highlighted in a new report from Chainalysis, which tracked $104.1 billion across 18.1 million transfers involving China’s self-custodied stablecoin holdings during the 2026 reporting period, spanning from July 2025 to June 2026. 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, indicating that users treat stablecoins as working capital.
Chainalysis estimated that China’s crypto economy is worth at least $176 billion, with domestic P2P activity accounting for 59.1% of the total, a sharp increase from its share in the 2025 reporting period. The largest monthly increase in domestic stablecoin transfer volume occurred in March 2026, adding $4.9 billion. This growth is particularly notable given China’s longstanding restrictions on crypto trading, which were reinforced in February with new rules targeting unauthorized yuan-pegged stablecoins and tokenized real-world assets.
The report also contrasted China’s P2P-heavy market with other East Asian markets. South Korea, ranked as East Asia’s largest crypto economy at $449.1 billion, saw a 12.3% growth in activity, with retail traders favoring AI-linked tokens. Hong Kong stood out for institutional activity, with institutional platforms accounting for 16% of service inflows, nearly three times the share in any regional neighbor. The city received almost $24 billion in inbound business-to-business flows, and Hong Kong issued its first stablecoin licenses in April.
In Japan, decentralized exchanges (DEXs) accounted for nearly 35% of service activity, the highest share among mature East Asian markets. Chainalysis noted that 65.7% of DEX swaps were between $10 and $1,000, and DEX activity had risen more than 200% since 2022. Japanese lawmakers passed revisions in July that bring digital assets under the country’s financial-markets framework.