China’s P2P Stablecoin Wallets Surge Despite Crypto Restrictions

China’s peer-to-peer (P2P) stablecoin wallet activity surged 43-fold between the first quarter of 2024 and the second quarter of 2026, according to Chainalysis. Despite China’s strict cryptocurrency trading restrictions, the data reveals a rapid increase in direct wallet-to-wallet transactions. Over the 12 months from July 2025 to June 2026, $104.1 billion moved across 18.1 million transfers involving self-custodied stablecoins. These holdings turned over 33.2 times annually, significantly higher than the global average of 9.3 times.

The high turnover rate suggests stablecoins are being used as working capital for frequent transactions, such as payments, settlements, or trading. Domestic P2P activity in China accounted for 59.1% of the broader crypto economy, which Chainalysis estimates at $176 billion. This represents a sharp increase from the previous year, highlighting the growing reliance on P2P channels despite regulatory tightening.

In March 2026, China saw a $4.9 billion monthly increase in domestic stablecoin transfer volume, the largest in the dataset. This growth occurred amidst Beijing’s stricter crypto regulations, including expanded restrictions on virtual currencies and yuan-linked stablecoins. Chinese authorities continue to classify virtual-currency-related business activities as illegal financial activities, yet the data shows that crypto activity has persisted outside conventional exchange models.

East Asia’s crypto market structures vary significantly. South Korea leads with a $449.1 billion market, driven by retail traders. Hong Kong is developing institutionally weighted infrastructure, while Japan sees rising decentralized exchange (DEX) activity. These differences highlight the diverse approaches to crypto adoption across the region.