China's crypto P2P flows hit $176B despite trading ban

Peer-to-peer crypto activity in China has continued to expand despite the mainland's ban, with P2P transaction volume reaching $176 billion. Over the past year, the share of P2P transfers rose 3.5 times as users increasingly moved funds directly between wallets rather than through centralized exchanges. Chainalysis highlighted the sharpest shift in stablecoins. From Q1 2024 to Q2 2026, the number of unique wallets sending fiat-backed tokens to other users jumped 43-fold. Analysts found that smaller payments began accelerating from March 2025: transfers under $100 surged 996%, transactions between $100 and $1,000 rose 1,057%, and those from $1,000 to $10,000 climbed 1,321%. Across the period, researchers counted 18.1 million stablecoin P2P transactions totaling $104.1 billion. They estimated average stablecoin holdings on wallets at about $3.1 billion. Stablecoins in China turned over roughly 33.2 times per year, far above the global average of 9.3 times. Chainalysis said that pace looks more like payment usage and working capital than long-term savings, suggesting stablecoins have formed a de facto parallel payment channel in the country. The rise in P2P activity also coincided with the expansion of China's social credit system into finance and internet services beginning in March 2025. Chainalysis analysts said some users may be shifting toward crypto transfers due to constraints in traditional financial rails or a preference to transact outside government-controlled systems. Analysts contrasted the mainland's trajectory with Hong Kong, Japan, Singapore, and South Korea, where digital asset trading is being pushed into regulated infrastructure. In mainland China, a significant share of activity has instead concentrated in direct user-to-user transfers. Earlier, eight Chinese regulators—including the People's Bank of China and the China Securities Regulatory Commission (CSRC)—barred companies and individuals from issuing yuan-pegged stablecoins without special authorization.