China’s underground crypto economy is increasingly shifting toward peer-to-peer stablecoin payments despite Beijing’s longstanding restrictions on digital assets.

Chainalysis estimates China generated at least $176 billion of crypto activity during the 12 months through June 2026, with 59.1% occurring through domestic peer-to-peer transfers rather than exchanges and other centralized platforms.

That share was 3.5 times higher than in the previous period, marking an unusual divergence from most major crypto markets, where exchanges remain the primary entry and exit point for users.

The shift has been particularly pronounced in stablecoins. Chainalysis said domestic stablecoin payment activity began accelerating around March 2025 and continued expanding for 13 consecutive month-over-month periods, suggesting a gradual migration toward wallet-to-wallet settlement inside the country.

The amount of new activity added each month rose from roughly $240 million in March 2025 to almost $5 billion about a year later. Growth was also concentrated across transaction sizes consistent with individuals and smaller businesses rather than solely large institutional transfers.

Stablecoin volumes below $100 jumped 996% around the start of that shift, while transfers between $100 and $1,000 increased 1,057%. Activity between $1,000 and $10,000 climbed 1,321%, Chainalysis said.

The blockchain analytics firm said the timing raises the possibility that tighter integration of China’s social-credit system with financial and internet infrastructure is encouraging some users to transact outside traditional payment channels.

China expanded aspects of the system into finance and online activity in March 2025. Chainalysis said people whose access to conventional financial services has been restricted could potentially turn to crypto, while others may use stablecoins to settle transactions outside monitored banking or e-commerce platforms.

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