China’s crypto restrictions are best read as having redirected activity rather than removed it. Under a comprehensive ban, cryptocurrency use in mainland China has shifted towards peer-to-peer stablecoin transfers, and the number of unique wallets sending those transactions grew 43-fold between Q1 2024 and Q2 2026.
The model reduces reliance on a centralised exchange. Chinese users have favoured direct wallet-to-wallet transfers, using self-custodied wallets in which they control their own cryptographic keys and no exchange sits between the two parties.
Chainalysis recorded $104.1 billion across 18.1 million transfers involving China’s self-custodied stablecoin holdings from July 2025 to June 2026. Those holdings turned over 33.2 times per year, more than three times the global average of 9.3 times per year.
The domestic market has become increasingly centred on these transfers. Chainalysis estimated China’s crypto economy at at least $176 billion, with domestic peer-to-peer activity accounting for 59.1% of total crypto activity, a 3.5-fold rise from the previous reporting period.
China’s domestic stablecoin transfer volume added $4.9 billion in March 2026, the largest monthly increase shown in the data.
Authorities reinforced crypto-trading restrictions in February 2026, adding rules aimed at unauthorised yuan-pegged stablecoins and tokenised real-world assets. The data nevertheless points to users choosing arrangements that leave no centralised platform in the middle of a transfer.
Chainalysis has also identified a possible connection between the growth in China’s peer-to-peer transfers and the expansion of its social credit system. The company describes that connection as a “working hypothesis”, rather than an established finding.
The Chinese market sits within a region taking sharply different approaches to digital assets. South Korea is East Asia’s largest crypto economy, valued at $449.1 billion. Hong Kong issued its first stablecoin licences in April.
Hong Kong received almost $24 billion in inbound business-to-business flows, while institutional platforms made up 16% of its service inflows, nearly three times the share of any regional neighbour.
Japan has a more active decentralised-exchange market. Such exchanges accounted for nearly 35% of service activity, the highest share among mature East Asian markets, and activity had risen more than 200% since 2022. Of decentralised-exchange swaps in Japan, 65.7% were between $10 and $1,000.
Japanese lawmakers passed revisions in July that bring digital assets within the country’s financial-markets framework. The Chainalysis figures were compiled by an organisation whose policy advisory lead is Jordan Wain.
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