China’s crypto ban Is failing to stop a $176 billion P2P economy

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.Stablecoins dominate local activity in ChinaThe 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 institu...