Key Points:
- China’s peer-to-peer stablecoin wallets increased 43-fold between Q1 2024 and Q2 2026, processing $104.1 billion across 18.1 million transfers despite the country’s cryptocurrency restrictions.
- South Korea ranked as East Asia’s largest crypto economy, with $449.1 billion in activity, even as domestic exchange operating profits fell 78% in the first half of 2026.
- Across Asia, financial institutions are expanding tokenization, crypto custody and payment services, while Hong Kong advances licensing reforms and Japan increases regulatory oversight.
Asia’s digital-asset market is developing along contrasting paths, with peer-to-peer stablecoin activity expanding in China despite restrictions, South Korea maintaining the region’s largest crypto economy, and financial institutions across major financial centers building regulated blockchain services.
Data from blockchain analytics firm Chainalysis highlights the scale of these developments, showing how stablecoin use, institutional participation and decentralized trading are evolving across East Asia.
China’s P2P Stablecoin Activity Expands Despite Restrictions
The number of unique wallets sending peer-to-peer stablecoin transactions in China increased 43-fold between the first quarter of 2024 and the second quarter of 2026, according to Chainalysis.
During the reporting period covering July 2025 through June 2026, the company recorded $104.1 billion in activity across 18.1 million transfers involving self-custodied stablecoin holdings.
Stablecoin holdings turned over 33.2 times annually, compared with a global average of 9.3 times. Chainalysis said the pattern was consistent with users treating stablecoins as working capital rather than simply holding them as long-term investments.
China’s crypto economy reached an estimated minimum of $176 billion, with domestic peer-to-peer activity accounting for 59.1% of the total. That share was 3.5 times its proportion during the previous reporting period.
The figures illustrate the continued importance of peer-to-peer channels within China’s digital-asset economy despite restrictions on cryptocurrency-related activities.
South Korea Leads East Asia as Exchange Profits Fall
South Korea ranked as East Asia’s largest cryptocurrency economy, recording $449.1 billion in activity through June 2026. Chainalysis reported annual growth of 12.3%, with retail traders showing a strong preference for AI-linked tokens.
However, the growth in overall activity has not translated into stronger financial performance for local exchanges.
South Korean crypto exchanges recorded a 78% decline in operating profits during the first half of 2026. The Korea Financial Intelligence Unit reported that average daily trading volume fell 44% compared with the preceding six months. Market capitalization declined 33%, while won-denominated customer deposits dropped 35%.
Exchange sales fell 41%, despite a 0.4% increase in the number of accounts eligible to trade.
The divergence highlights how a large national crypto economy can coexist with deteriorating exchange profitability as trading activity and asset valuations weaken.
Tokenization Gains Ground in South Korea
South Korea is also preparing to expand its tokenized-securities market.
Tokenization platform Securitize and South Korean technology company LG CNS signed a memorandum of understanding to develop tokenized assets and digital-asset infrastructure for financial institutions.
The partnership comes as the Financial Services Commission advances rules for issuing and circulating tokenized stocks, bonds, funds and other securities. The framework is scheduled to take effect in February 2027.
The initiative could create opportunities for infrastructure providers as South Korea develops a more formal regulatory framework for blockchain-based securities.
Singapore Expands Institutional Crypto Services
Singapore continues to attract institutional digital-asset businesses. Standard Chartered announced plans to introduce custody services for selected cryptocurrencies, stablecoins and tokenized real-world assets for institutional clients and qualifying corporate investors.
Independent Reserve expanded its business services with cross-border fiat and stablecoin payments, allowing businesses to fund accounts in Singapore or US dollars and make payments in more than 20 currencies. Its subsidiary ReserveX also introduced crypto derivatives trading for sophisticated investors.
Separately, Payward, the parent company of Kraken, partnered with Singapore Gulf Bank to support round-the-clock institutional crypto settlement.
These developments demonstrate how regulated financial services, custody and payment infrastructure are becoming increasingly important components of the regional digital-asset market.
Hong Kong and Japan Develop Distinct Market Models
Hong Kong reaffirmed plans to submit legislation by the end of 2026 to establish licensing regimes for digital-asset trading, custody, advisory and management services. Chainalysis also identified strong institutional activity in the city, where institutional platforms accounted for 16% of service inflows and inbound business-to-business flows approached $24 billion.
Japan, meanwhile, recorded substantial growth in decentralized exchange activity. DEXs represented nearly 35% of service activity in mature East Asian markets, while 65.7% of Japanese DEX swaps were valued between $10 and $1,000. Activity had increased more than 200% since 2022.
At the same time, Japan expanded sanctions against Russia to include cryptocurrency exchange Garantex, reflecting the continuing use of financial restrictions in response to the war in Ukraine.
Elsewhere in the region, Indian authorities arrested four people in an alleged technology-support fraud targeting US residents through fake computer warnings and extortion. In Thailand, armed assailants reportedly forced a victim to transfer approximately $820,000 in cryptocurrency during a home robbery.
Outlook
Asia’s digital-asset landscape is becoming increasingly diverse. China’s peer-to-peer stablecoin activity demonstrates continued demand for blockchain-based transfers despite restrictions, while South Korea combines a large crypto economy with pressure on exchange profitability. Singapore, Hong Kong and South Korea are developing institutional infrastructure and tokenization frameworks, while Japan’s expanding decentralized trading activity coexists with tighter regulatory enforcement. The region’s next phase will depend on how effectively these markets balance user demand, institutional participation, financial stability and regulatory oversight.
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