By Chinese payments giant Alipay has denied supporting cryptocurrency trading through third-party platforms after decentralized marketplace Peer announced a service allowing users to buy and sell USD Coin (USDC) using Chinese yuan payments.
In a statement published on October 28, 2026, Alipay said it had not authorized cryptocurrency purchases through outside platforms and warned customers about potential risks to their funds and payment accounts. The clarification followed Peer’s October 27 announcement that its beta service supported yuan transfers through Alipay for peer-to-peer USDC transactions.
Peer subsequently emphasized that it had no formal partnership or technical integration with the payment provider. The disagreement highlights the distinction between using a payment application to transfer money between individuals and obtaining authorization to facilitate cryptocurrency trading.
It also underscores the regulatory challenges facing platforms attempting to connect mainland Chinese payment infrastructure with blockchain-based assets.
Peer Reports 107 USDC Trades Through Alipay Payments
Peer’s service allows buyers and sellers to exchange USDC through a combination of conventional yuan transfers and blockchain-based escrow. Under the arrangement, sellers deposit USDC into a smart contract on the Base network before buyers initiate payment.
Buyers then transfer yuan directly to sellers using Alipay, rather than purchasing cryptocurrency from the payment company itself. Once payment is confirmed, the escrow contract releases USDC to the buyer’s cryptocurrency wallet.
Peer said its payment arrangement had been operating since August 21, ahead of the public beta announcement. During that period, the platform reported 107 completed transactions involving 45 buyers, representing approximately $7,094 in total trading volume.
That equates to an average transaction value of approximately $66. The figures were provided by Peer and have not been independently verified by Alipay. Peer’s documentation describes a maximum service fee of 0.95%, with additional charges potentially applying to cross-chain transfers.
Although the platform presents the process as transactions between individual users, Alipay has made clear that it does not authorize its payment services for cryptocurrency trading. The company has not announced whether specific accounts have been restricted or whether Peer’s payment option has been technically disabled.
China’s Crypto Restrictions Remain in Force
Alipay’s response reflects China’s longstanding restrictions on cryptocurrency trading and related payment services. In September 2021, Chinese authorities declared cryptocurrency exchange activities and related financial services illegal, while directing payment institutions to prevent transactions connected to virtual currencies.
The restrictions cover activities involving fiat-to-cryptocurrency conversions, exchange operations and the provision of payment services for cryptocurrency businesses. Chinese authorities reinforced the framework in February 2026 through updated rules addressing virtual currency activities and associated financial risks.
Although individuals may still attempt to exchange cryptocurrency through informal peer-to-peer arrangements, the availability of a payment method does not establish regulatory permission. Alipay has previously stated that it monitors transactions for suspected cryptocurrency-related activity and can restrict accounts involved in prohibited services.
Its latest warning therefore raises operational risks for users who rely on third-party platforms advertising access to its payment network. However, the company has not confirmed any new enforcement measures specifically targeting Peer. The distinction is important for stablecoin adoption.
USDC is a dollar-pegged cryptocurrency widely used for trading and blockchain payments, but its technical availability does not override local restrictions on financial services. Peer’s reported $7,094 in transactions also represents a limited pilot rather than evidence of significant new institutional or retail demand.
For cryptocurrency platforms, the incident demonstrates the difficulties of integrating decentralized settlement systems with regulated domestic payment networks. For Alipay, the immediate objective is clarifying that independent cryptocurrency transactions conducted between its users do not constitute an approved trading service.
Whether Peer continues offering the payment option will depend on subsequent platform decisions and any regulatory or payment-account enforcement.