China P2P Stablecoin Wallets Grew 43 Fold Despite Ban

China's crypto economy reached at least $176 billion in the year through June 2026, with 59.1 percent of activity flowing through domestic peer-to-peer transfers instead of exchanges. The estimate comes from Chainalysis in its Eastern Asia report published Oct 5, which puts the precise figure at $176.3 billion. CryptoSlate called the number a floor rather than a ceiling, since the analytics firm says the true size may be higher under a ban that suppresses local flows.

"Sustained a fairly dramatic increase for 13 complete MoM periods," the analytics firm wrote of domestic stablecoin payments from March 2025 forward. Each monthly bar in its chart shows what the month added rather than the total, so rising bars mean the country added more each month than the month before, from about $240 million in March 2025 to nearly $5 billion a year later.

The peer-to-peer share stood 3.5 times higher than in the prior period. That marks an unusual split from most large crypto markets, where exchanges remain the main on-ramp, CryptoSlate observed. Because formal venues stay banned on the mainland, activity moved into direct wallet transfers that need no domestic intermediary.

Unique wallets sending stablecoin peer-to-peer transactions multiplied 43 times between the first quarter of 2024 and the second quarter of 2026. Cointelegraph reported the 43-fold count from the same data, and placed the $104.1 billion moved across 18.1 million transfers inside the July 2025 to June 2026 window. The figures cover self-custodied holdings rather than exchange balances.

Growth clustered in sizes that fit individuals and small businesses. Volumes under $100 rose 996 percent around the start of the March 2025 shift, while the $100 to $1,000 band climbed 1,057 percent and the $1,000 to $10,000 band jumped 1,321 percent, according to the report. The pattern points to everyday payments use rather than a few large institutional transfers.

Turnover tells the same story. China turned its self-custodied stablecoin holdings over 33.2 times per year, more than three times the world average of 9.3 times. Japan turned its stablecoins 9.9 times a year, Hong Kong 6.1 times, South Korea 5.1 times and Taiwan 3.5 times, the firm found. On average holdings of about $3.1 billion, wallets attributed to China moved $104.1 billion in the period.

High turnover fits money that works rather than money that sits. Chainalysis said the pace matches a user base treating stablecoins as working capital, a pattern one would expect if the asset were becoming a functional domestic payment rail. CryptoSlate put the implication plainly, writing that the same pool of tokens kept returning to circulation instead of resting in wallets.

A possible link to tighter monitoring

The timing lines up with an expansion of state oversight. In March 2025, a few months before the study window opened, officials extended the social credit system into finance and the internet, the report says. That system scores behavior and can restrict travel, credit, jobs and financial services, and it has been tied into bank compliance systems over several years.

The report offered two ways the change could push people toward crypto. People cut off from conventional rails might use assets that resist censorship, while others might settle deals off monitored channels, for instance by listing goods on domestic shopping sites and then sharing a crypto address over Telegram to close payment. The firm stressed the idea remains only a working hypothesis, since chain data shows when and how coins move but not why a person picked one payment method over another.

The ban itself keeps tightening around the edges. Authorities reinforced restrictions in February with new rules aimed at unauthorized yuan-pegged stablecoins and tokenized real-world assets, Cointelegraph noted. Exchange limits can shut formal doors, yet self-custodied dollar tokens keep moving through wallet-to-wallet paths and over-the-counter networks that need no local order book.

Neighbors took different routes and got different markets. South Korea led the region at $449.1 billion and grew 12.3 percent on retail trading, with won activity concentrated in AI-linked tokens. Japan reached $228.3 billion with decentralized exchanges near 35 percent of service activity, the highest share among mature markets in the area. Hong Kong hit $192.2 billion with institutional platforms at 16 percent of service inflows, almost three times any regional peer, plus nearly $24 billion in inbound business-to-business flows. Taiwan closed the table at $140.4 billion. All four figures come from the same report.

Policy staff at the analytics firm expect part of the region to converge. "We expect the institutional layer to look increasingly alike from one market to the next," Jordan Wain, policy advisory lead at Chainalysis, told Cointelegraph in comments published Oct 5 and updated Oct 6. Retail rules will stay distinct, he added, since what a consumer can legally buy still differs sharply across borders.

For issuers and service firms, the mainland looks like large demand that is hard to serve head-on. Growth would run through offshore platforms, over-the-counter desks and self-custody rather than standard consumer products, given the regulatory bar. Whether the acceleration lasts as Beijing widens oversight of digital payments is the open point, and the next data set will show if smaller transfers keep rising alongside the fast wallet turnover.