The Growth of Gray Crypto Payments in China is Linked to Social Credit Ratings

The use of stablecoins and direct cryptocurrency transactions in China has significantly increased amid the expansion of the social credit rating system. Analysts at Chainalysis noted that some citizens have turned to cryptocurrency payments due to the loss of access to traditional financial services, while others seek to avoid oversight. By 2026, the volume of China's crypto economy is expected to reach at least $176 billion, with 59.1% consisting of P2P transactions, which is 3.5 times higher compared to previous periods. The growth began after March 2025, when the social credit rating extended into the financial sector. Since March 2025, the volume of transfers in stablecoins up to $100 has increased by 996%, while those in the ranges of $100 to $1,000 and $1,000 to $10,000 have risen by 1,057% and 1,321%, respectively. The turnover rate of stablecoins in China exceeds the global average by more than three times, indicating that users view them as working capital. South Korea leads the region with a crypto economy volume of $449.1 billion, followed by Japan, Hong Kong, China, and Taiwan.

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