Unique wallets sending peer-to-peer stablecoin transactions in China grew 43-fold between Q1 2024 and Q2 2026, according to a new Chainalysis report, a surge that unfolded entirely under the country's longstanding prohibition on cryptocurrency trading.

The blockchain analytics firm recorded $104.1 billion across 18.1 million transfers involving China's self-custodied stablecoin holdings during the 2026 reporting period, which ran from July 2025 to June 2026. The figures show crypto activity migrating away from exchanges and toward direct wallet-to-wallet transfers that are harder for intermediaries to police.

Turnover data reinforces the shift. Stablecoin holdings in China turned over 33.2 times per year, more than three times the global average of 9.3 — a pattern Chainalysis said was consistent with users treating stablecoins as working capital rather than as buy-and-hold assets.

How big is China's crypto economy now?

Chainalysis estimated the Chinese crypto economy at a minimum of $176 billion. Domestic P2P activity accounted for 59.1% of that total, or 3.5 times its share in the 2025 reporting period.

The growth persisted despite intensified regulatory pressure. In February, Chinese authorities reinforced existing restrictions with new rules targeting unauthorized yuan-pegged stablecoins and tokenized real-world assets. The enforcement push has not stemmed wallet-to-wallet flows, which sit largely outside the reach of exchange-level controls.

How does China compare within East Asia?

The P2P-heavy Chinese market stands apart from its neighbors, which display sharply different structures:

• South Korea — East Asia's largest crypto economy at $449.1 billion, with activity up 12.3% from the previous period. Retail traders showed a strong preference for AI-linked tokens.
• Hong Kong — Institutional platforms accounted 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 issued its first stablecoin licenses in April.
• Japan — Decentralized exchanges accounted for nearly 35% of service activity, the highest share among mature East Asian markets. Some 65.7% of DEX swaps fell between $10 and $1,000, and DEX activity has risen more than 200% since 2022.

Japan's regulatory framework is also moving. Lawmakers passed revisions in July that bring digital assets under the country's financial-markets framework, a change that formalizes the asset class within existing securities-style supervision.

What does the P2P shift mean operationally?

The 43-fold wallet growth signals a structural change in how value moves through China's crypto market. Self-custodied transfers bypass the centralized exchanges that regulators can license, inspect or shutter. Enforcement pressure on yuan-pegged stablecoins and tokenized real-world assets may therefore push more volume onto rails that fall outside conventional supervisory perimeters.

The 33.2x annual turnover rate suggests the flows function as transactional liquidity — settling trade, remittance or gray-market payments — rather than speculative positions. That distinction matters for compliance teams and analytics firms, because high-velocity P2P stablecoin usage resembles payment-network behavior more than investment behavior.

For regional policymakers, the divergence is now stark. Hong Kong issues stablecoin licenses and courts institutional flow; Japan folds digital assets into its financial-markets framework; South Korea channels retail speculation through regulated exchanges; and China's activity migrates to self-custodied wallets at record scale.

Chainalysis's next reporting period will show whether February's tightened rules on unauthorized yuan-pegged stablecoins and tokenized assets slow the wallet-to-wallet channel — or, as the past two years suggest, merely accelerate it.