India's USDT Premium Hits 8.5% as Bengaluru Raids Wreck the Remittance Shortcut 💸

Tether's USDT, the world's largest dollar-pegged stablecoin with a market cap of $184.68 billion, is trading more than 8.5% above its dollar value on Indian crypto platforms after enforcement action against crypto payment firms tightened local supply. Over the weekend, USDT changed hands at around ₹102.88 against an official dollar-rupee rate of about 94.65, according to local publication ET, more than double the 3%–4% gap that typically defines the so-called USDT premium. The spread, the extra rupees Indian buyers pay for dollar exposure via the stablecoin instead of through a bank, widens whenever local demand outpaces the supply of tokens actually available to trade.

The squeeze followed a June 17 operation by India's Enforcement Directorate, which searched six premises in Bengaluru under the Foreign Exchange Management Act. The agency is targeting five crypto payment firms it alleges moved more than $265 million in unauthorized cross-border transfers using digital assets, running what it described as an informal remittance channel in which rupees were deposited into company accounts, converted into stablecoins, and sold on Indian exchanges, bypassing the paperwork and approvals that formal routes require under FEMA and India's anti-money-laundering law. After the action was announced, market makers and liquidity providers pulled back from sourcing USDT overseas, shrinking the domestic pool just as the off-ramps feeding it came under pressure.

Executives at two of India's largest exchanges said the move reflects local order-book depth rather than exchange-set pricing. Minal Thukral, executive vice president of CoinDCX, said the INR price of USDT is set by local order-book depth and the global dollar reference. "India has structurally been a net buyer of crypto, so local INR demand often runs ahead of available sell-side liquidity. When that liquidity is thinner near the global reference price, the market clears higher," Thukral said, adding that the premium then acts as a signal of the local arbitrage band, measuring how expensive or slow it is for liquidity providers to replenish supply and close the gap.

CoinSwitch co-founder and CEO Ashish Singhal gave a similar account, stressing that the premium is not something exchanges are setting themselves and that, as with any actively traded asset, it moves with local demand and supply. Both executives tied the surge to the same supply-side dynamic described by ET, with the Enforcement Directorate's action accelerating a withdrawal of overseas sourcing that had already kept the premium structurally elevated. Premiums between 7% and 10% were observed on Indian platforms over the weekend, according to CoinDesk reporting, leaving USDT trading at levels well outside its typical band and underscoring how thin the country's stablecoin rails remain under regulatory pressure.