China's Crypto Ban Shifted $104 Billion in Stablecoin Payments to Unregulated Wallets

Since September 2021, China has banned all crypto transactions, leaving no licensed exchanges or payment firms to verify stablecoin payments. A new Chainalysis report shows that in mainland China, individuals moved $104.1 billion in stablecoins through personal wallets by mid-2026, with no banks or exchanges involved.

The report highlights a significant increase in unique wallets used for stablecoin transfers in mainland China, rising 43-fold between early 2024 and mid-2026. These wallets held an average of $3.1 billion in stablecoins, which turned over 33.2 times a year, far exceeding the global average of 9.3.

Chainalysis attributes this high turnover to users treating stablecoins as working capital rather than savings. The report also notes that stablecoin payments in China are increasingly resembling a domestic payment system, with frequent transfers averaging around $5,750 each.

Despite Beijing's tightening regulations, including a 2026 statement by the People's Bank of China warning against stablecoins for cross-border transfers, individuals continue to use personal wallets for payments. This creates risks for foreign companies, as the legal status of these funds remains unclear.

For U.S. and European companies receiving stablecoin payments from Chinese partners, verification responsibilities fall on the receiving end. Experts recommend checking wallet authenticity, tracing transaction history, and ensuring funds are from verified sources to mitigate risks.

In contrast, Hong Kong's licensed stablecoin services attracted $17.4 billion in business-to-business inflows by mid-2026, with institutional platforms playing a key role. Licensing in Hong Kong has expanded, with the first stablecoin licenses issued in April 2026, though the licensed route remains competitive with unregulated wallet transfers.