Asia's Crypto Landscape Transforms: China's P2P Stablecoin Use Jumps 43-Fold While Korea's $450B Market Faces Headwinds

China's Peer-to-Peer Stablecoin Activity Multiplies Despite Regulatory Bans

A new report from blockchain analytics firm Chainalysis reveals that the number of unique wallets conducting peer-to-peer stablecoin transfers in China expanded by a factor of 43 between the first quarter of 2024 and the second quarter of 2026. Despite the country's ongoing prohibitions on cryptocurrency trading, domestic adoption of stablecoins as a payment and settlement tool has accelerated dramatically.

During the 2026 reporting window, which spanned July 2025 through June 2026, Chainalysis recorded $104.1 billion in value moving across 18.1 million transfers linked to China's self-custodied stablecoin holdings. The speed at which those funds changed hands was striking: stablecoin balances turned over 33.2 times per year, a rate more than three times the global average of 9.3 rotations. Chainalysis noted that this velocity pattern suggests users are treating stablecoins as working capital rather than long-term store-of-value assets.

The firm's broader estimate puts the value of China's overall crypto economy at a minimum of $176 billion. Domestic peer-to-peer activity represented 59.1 percent of that total, a share that is 3.5 times larger than its proportion in the 2025 reporting period. The single largest monthly increment in domestic stablecoin transfer volume was $4.9 billion, recorded in March 2026.

South Korea: Largest East Asian Crypto Economy but Shrinking Exchange Margins

Chainalysis ranked South Korea as the largest crypto economy in East Asia, valuing the sector at $449.1 billion. Year-over-year activity through June 2026 grew 12.3 percent compared with the prior twelve months, with retail participants showing a pronounced appetite for tokens tied to artificial intelligence projects.

That growth in overall market size, however, has not translated into healthy returns for local exchange operators. Operating profits at South Korean crypto exchanges fell by 78 percent in the first half of 2026, driven by simultaneous declines in trading volumes, market valuations, and customer deposits.

The Korea Financial Intelligence Unit (KoFIU) reported that average daily trading volume on domestic virtual-asset exchanges dropped 44 percent relative to the preceding six months. Market capitalization contracted by 33 percent, while won-denominated customer deposits shrank 35 percent. Exchange revenue declined 41 percent over the same stretch, even as the number of accounts eligible to trade edged up by a marginal 0.4 percent.

Amid the downturn, tokenization platform Securitize saw its shares rally sharply on Tuesday following the announcement of a memorandum of understanding with South Korean technology firm LG CNS. The two companies plan to jointly develop tokenized assets and digital-asset infrastructure tailored to South Korean financial institutions. The deal positions Securitize for an early entry into the Korean market as the country's Financial Services Commission moves to formalize its regulatory framework. Just last week, the FSC proposed rules governing the issuance and circulation of tokenized stocks, bonds, funds, and other securities, with the new regime scheduled to take effect in February 2027.

Institutional and Regulatory Moves Across Singapore, Hong Kong, and Japan

Several major financial institutions expanded their digital-asset footprints in the region this week. London-headquartered Standard Chartered announced plans to offer digital-asset custody services in Singapore for institutional and corporate clients who qualify as accredited investors. The bank will custody select cryptocurrencies, stablecoins, and tokenized real-world assets, citing Singapore's status as a leading financial and innovation hub as a pillar of its global strategy.

Singapore-licensed exchange Independent Reserve introduced cross-border payment tools that allow businesses to issue fiat and stablecoin payouts in more than 20 currencies. Accounts can be funded in Singapore dollars or US dollars, with USDC and USDT also accepted as funding options. The firm also launched crypto derivatives trading for sophisticated investors through its subsidiary ReserveX.

In a separate partnership, Payward—the parent company of Kraken—and Singapore Gulf Bank announced a collaboration to enable round-the-clock institutional crypto settlement.

In Hong Kong, Secretary for Financial Services and the Treasury Christopher Hui confirmed at a Monday policy briefing that the government will table an amendment bill within the current year to establish licensing regimes covering digital-asset trading, custody, advisory, and management services. The bill forms part of a broader crypto-licensing framework. Chainalysis's Geography of Cryptocurrency report highlighted Hong Kong's institutional activity: institutional platforms accounted for 16 percent of service inflows, nearly triple the share seen in any neighboring market. The city also received close to $24 billion in inbound business-to-business flows and issued its first stablecoin licenses in April of this year.

In Japan, decentralized exchanges now represent nearly 35 percent of all service activity—the highest proportion among mature East Asian markets. Chainalysis found that 65.7 percent of DEX swaps fell in the $10-to-$1,000 range, and overall DEX activity has risen more than 200 percent since 2022. Japanese lawmakers passed revisions in July that formally bring digital assets under the country's financial-markets regulatory framework.

Japan also expanded its economic sanctions against Russia, adding cryptocurrency exchange Garantex to its asset-freeze list. A joint statement issued Friday by the Ministry of Foreign Affairs, Ministry of Finance, and Ministry of Economy, Trade and Industry confirmed the inclusion of 33 organizations and nine individuals linked to Russia. Garantex had previously been sanctioned by the United States, the European Union, and other jurisdictions for facilitating financial restrictions evasion by Russian entities in the context of the ongoing war in Ukraine.

Security Incidents in India and Thailand

On the criminal-justice front, India's Central Bureau of Investigation announced the arrest of four individuals connected to an alleged international tech-support fraud and extortion scheme targeting US nationals. The operation relied on fake computer pop-up windows displaying toll-free numbers attributed to Microsoft. Victims who dialed the numbers were told their machines had been compromised or linked to illegal content, including child pornography, a pretext used to extract payments. One resident of Florida reportedly lost $440,000 to the scammers.

In Thailand, three armed assailants broke into a home in Bang Lamung and forced a foreign resident to transfer cryptocurrency valued at $820,000. The robbers also seized cash and three Rolex watches. Thai police believe the suspects may be Chinese nationals.