Blockchain data shows a sharp rise in self-custodied stablecoin activity inside China even as authorities maintain longstanding prohibitions on cryptocurrency trading and exchanges. Unique wallets sending peer-to-peer stablecoin transactions grew 43-fold between the first quarter of 2024 and the second quarter of 2026. The expansion centers on direct wallet-to-wallet transfers rather than any reopening of formal exchange services.

Scale of Domestic Stablecoin Flows

Between July 2025 and June 2026, stablecoin transfers involving China’s self-custodied holdings totaled $104.1 billion across 18.1 million transactions. These holdings turned over 33.2 times per year, more than three times the global average of 9.3 times. The elevated rate indicates that stablecoins functioned primarily as working capital for frequent transfers rather than as long-term stores of value.

China’s overall crypto economy was estimated at a minimum of $176 billion during the period. Domestic peer-to-peer activity accounted for 59.1 percent of that total, a share 3.5 times higher than in the previous reporting window. March 2026 marked the strongest monthly gain, with domestic stablecoin transfer volume rising by an additional $4.9 billion.

Regulatory Backdrop Remains Restrictive

The growth occurred against a backdrop of continuous official restrictions. China has long banned cryptocurrency exchanges and related services. In February, authorities reinforced those measures with new rules aimed at unauthorized yuan-pegged stablecoins and tokenized real-world assets. The on-chain data captures activity among self-custodied wallets and does not signal any formal easing of the exchange ban or broader policy shift.

Contrasting Patterns Across East Asia

China’s peer-to-peer-heavy profile stands apart from neighboring markets. South Korea ranked as East Asia’s largest crypto economy at $449.1 billion, with overall activity expanding 12.3 percent from the prior period. Retail participants there displayed a clear preference for tokens linked to artificial intelligence themes.

Hong Kong recorded strong institutional participation. Institutional platforms represented 16 percent of service inflows, nearly three times the share observed in regional peers. The city attracted almost $24 billion in inbound business-to-business flows and issued its first stablecoin licenses in April.

Japan showed the highest decentralized exchange usage among mature East Asian markets, with nearly 35 percent of service activity occurring on DEXs. Activity on these platforms rose more than 200 percent since 2022, and 65.7 percent of DEX swaps fell in the $10 to $1,000 range, consistent with substantial retail involvement. In July, Japanese lawmakers approved revisions that place digital assets under the country’s formal financial-markets framework.

The regional figures illustrate divergent paths shaped by local rules and user behavior. China’s data remains limited to the self-custodied stablecoin metrics reported for the stated periods and does not capture the full scope of financial activity inside the country.