China P2P stablecoin wallets grew 43x despite crypto restrictions: Chainalysis

[Oshosondy]

China is hostile to crypto, but there are high number of bitcoin miners concentrated in the country. This is the first time that I am reading about stable coins in China: Chainalysis’s new report estimated that China’s crypto economy is worth at least $176 billion. Domestic P2P activity accounted for 59.1% of the total, 3.5 times its share in the 2025 reporting period. The blockchain analytics company 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.

https://cointelegraph.com/news/china-stablecoin-p2p-wallets-crypto-restrictions

According to the report, the transactions are sent directly from wallet to wallet. This shows how crypto can not be taken down by any government. If many people are into it, who even knows if the government officials are among.

[Munshi Prem Chand]

Chinese stablecoin balances are turning over at 33.2x annually, well above the 9.3x global average. Such activity is indicative of use in payments and commercial transactions (or moving money out of the country), as opposed to simply holding and speculation.

Tighter regulation did not reduce stablecoin usage in China; it just pushed activity into P2P channels outside centralized oversight. China strengthened its crackdown on stablecoins in Feb 2026 with new regulations targeting stablecoins pegged to yuan.

[noorman0]

I haven't really seen the Chinese government aggressively enforcing sanctions since the total ban, except perhaps at the corporate level. I suspect their measure of effectiveness is simply percentage-based; let's say, the government might still consider the situation under control as long as the number of violators does not exceed 20% of the total population.

Their vast landmass and geological structure pose obstacles to their ambition of having the entire population comply with those regulations.

[d5000]

China seems to be facing the dilemma that they either lose the digital currency race against the USD (also due to the dominance of USD-denominated stablecoins) or would have to allow CNY-denominated stablecoins [1].

For now, they chose not to change their policies. Even if one can say that with the growth mentioned in the OP in mind, their policy of "tight control" has likely failed. The e-CNY also struggles with adoption.

On the other hand, I've read elsewhere that the Chinese government probably doesn't care about the USD stablecoin growth as long as it stays relatively small, i.e. as long as stablecoins are used only by a minority of Chinese citizens. And that the more open regulation in Hong Kong could be a pilot project to reconsider the "de facto crypto ban".


[1] There are some CNY-denominated stablecoins, but they are not issued by Chinese entities, no license has been given to them even under Hong Kong law. The only CNY stablecoins are small and from foreign companies, Tether discontinued its CNY stablecoin this year due to low demand.

[asriloni]

China seems to be facing the dilemma that they either lose the digital currency race against the USD (also due to the dominance of USD-denominated stablecoins) or would have to allow CNY-denominated stablecoins [1].

For now, they chose not to change their policies. Even if one can say that with the growth mentioned in the OP in mind, their policy of "tight control" has likely failed. The e-CNY also struggles with adoption.

On the other hand, I've read elsewhere that the Chinese government probably doesn't care about the USD stablecoin growth as long as it stays relatively small, i.e. as long as stablecoins are used only by a minority of Chinese citizens. And that the more open regulation in Hong Kong could be a pilot project to reconsider the "de facto crypto ban".


[1] There are some CNY-denominated stablecoins, but they are not issued by Chinese entities, no license has been given to them even under Hong Kong law. The only CNY stablecoins are small and from foreign companies, Tether discontinued its CNY stablecoin this year due to low demand.

They never face dilemma about the stable coin. That's why they're always in stance to banning it from their country, and the report is only reporting 0.5% stable coin transaction compared to their total GDP, which is nothing  if we compared how big the percentage of stable coin transactions by other nations to their GDP.

There is also no demand to 3rd entity CNY stable coin (illegal), which is telling us their tight control is still considered success. They threatened their people to be jailed up to 6 six years if they use stable coin, and it makes me to assume all of their stable coin volume most probably come from illegal activities.

[_act_]

On the other hand, I've read elsewhere that the Chinese government probably doesn't care about the USD stablecoin growth as long as it stays relatively small, i.e. as long as stablecoins are used only by a minority of Chinese citizens.

The Chinese government just need to be careful and continue to handle inflation effectively. The countries that rely on stable coins are mostly relying on it because of the inflation in their country. If there is inflation in China, their citizens will probably look for alternatives and that will be probably stable coins that are pegged to United States dollar. If I am in a country that their fiat is good, there is no point of having a stable coin like USDT or digital Euro.